Pepper futures market has been witnessing a tight supply scenario locally and the situation is being exploited by some market players who have been squeezing and cornering the market for some time.

In fact, from June onwards such a situation persisted in the market, which was reflected in the September contract which matured on September 21. Prices were pushed up when other origins were ruling much below the Indian parity. Indian parity was at above $8,000 a tonne when all others were at around $7,000 a tonne for Asta grade material.

Domestic demand was met by sales from Rajasthan by stockists and 30-40 tonnes of pepper were reportedly being moved out to consumer markets right from Jammu to Nagpur in Maharashtra. Karnataka was offering at Rs 405 a kg but the stock there was said to be nearly exhausted, market sources said.

New pepper from Kollam and Thiruvananthapuram districts of Kerala started trickling in and immature green pepper suitable for making pepper in brine and dehydrated green pepper were reportedly bought from these districts by the industry at Rs 135-150 a kg.

Meanwhile, a report projecting a bumper crop in India in the Public Ledger, quoting Europe-based major dealers recently spread bearish sentiments in the market. However, farmers, dealers and traders here expressed the view that it was too early project the output in the country. An optimistic projection for the current season could remain somewhere between 50,000 and 60,000 tonnes (Karnataka 22,000-25,000 tonnes; Kerala 25,000-28,000 tonnes and Tamil Nadu 5,000-7,000 tonnes), trade sources said.

The Public Ledger quoted Rotterdam-based major dealer as claiming that “India expected a bumper crop in 2013 of about 65,000 tonnes, but the crop was likely to be delayed by one month”.

According to the report Vietnam shipped out some 90,000 tonnes of pepper between January and September and about 40,000 tonnes stocks were left for the September-December shipment period. Brazil still needed to market its entire 2012 crop of 30,000-35,000 tonnes and Lampong and Muntok still had some stocks left to sell for the coming months, the report said.

Most industry buyers had covered their needs for the September-December shipment months. Most of the industrial demand in October and November would be for the January to March 2013 shipment months.

According to the company, prices would be stable for September and October but warned that there could be price dips in late November and December as this was usually a very quiet period in pepper.

Vietnam anticipated a good crop which was slightly earlier than normal. The first light berries were likely to arrive in the local market in December. Production in 2013 was likely to be in the range of 135,000-145,000 tonnes.

Active contracts on the NCDEX last weekend ended in a mixed trend. October contract moved up by Rs 165 a quintal to the last traded price of Rs 43,200 a quintal while November and December dropped by Rs 65 and Rs 85 respectively to the LTP of Rs 42,950 and Rs 43,000 a quintal.

Total turn over last week dropped by 1,638 tonnes to 6,862 tonnes while total open interest declined by 36 tonnes to 6,429 tonnes.

Spot prices increased in tandem with the futures market trend and tight availability by Rs 300 a quintal last weekend to Rs 39,900 (ungarbled) and Rs 41,400 (garbled) a quintal.

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