The pepper market last week ruled more or less steady at higher levels on matching demand and supply.

Pepper availability remained tight as arrivals continued to remain thin. Spot prices remained above Rs 400 a kg for ungarbled pepper.

As Karnataka pepper was being sold evading the tax at Rs 415 a kg delivered anywhere in India, the Karnataka Tax Department has put all pepper transactions under scanners. This development is said to have tightened the supply situation.

The total open interest showed substantial increase indicating good additional buying.

As prices were ruling high for a long time this year, major buyers in the main seven centres in north India such as Nagpur, Gwalior, Indore, Ranchi, Delhi, Jaipur etc have not been keeping any inventory for more than three weeks because of the heavy investment involved.

Positive signs

Domestic demand have started showing positive signs last week following the onset of monsoon in some parts of north India. Tight availability continued to be a major problem and that has kept domestic prices much above the international parity. There were origin specific enquiries from overseas and also from the upcountry domestic market following the onset of monsoon in the north Indian states. Mr S. Kannan, Executive Director, International Pepper Community (IPC), said “small farmers in Lampung and Bangka will have selling pressure to get money to meet the expenses during the fasting days, which has started today as well as Ramadan. Hence the price is likely to come down till the second week of August. Even this price reduction will not be substantial because they can take advance if the prices are not agreeable to them.” The IPC, he said, sends price details of other origins through SMS on every Friday to major farmers. After August, prices will be increasing, due to lack of selling pressure as well as the completion of the arrivals from Indonesia by the end of August.

Domestic consumption

Unlike last year, the maturity is uniform and will be fully matured by the end of August. The supply may be extended up to second week of September and not beyond. Domestic consumption is also increasing at a very high rate. By that time and subsequently prices will see an increase and may touch around $8a kg. Brazil also will not sell pepper at lower price like last year. They have realised that they made a mistake of selling at lower rates last year before the crop came to the marketwith expectations of price falling. They may not like to burn their finger this year and hence will be very careful this year,” he added.

August, September and October contracts on the NCDEX at the weekend were nearly steady. August contract declined by Rs 45 a quintal to the last traded price (LTP) of Rs 43,250 a quintal on Saturday. September and October moved up by Rs 15 and Rs 75 respectively to the LTP of Rs 43,610 and Rs 44,050 a quintal. Total turnover fell by 2,056 tonnes to close at 24,494 tonnes. Total open interest increased by 960 tonnes to end at 6,273 tonnes at the weekend.

Spot prices also remained steady almost throughout last week on matching demand and supply at Rs 40,100 (ungarbled) and Rs 41,600 (garbled) a quintal.

Indian parity on the international market was at $7,900-8,000 a tonne (c&f) for Europe and $8,200-$8,300 a tonne for the US. Given this scenario, imports from other origins which were ruling below MG 1 cannot be ruled out, the trade said.

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