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Pepper futures on Wednesday shot up on strong buying support.
All contracts moved up sharply. The concerted efforts of those who wanted to pull the market down by spreading bearish reports that US buyers had rejected large quantities of Indian pepper because of the high presence of light berries, seem to have boomeranged. Those operators who had invested substantially in pepper recently steered the market up to the ceiling, which, many claimed was as a “a reaction with vengeance,” trade sources told Business Line .
There was heavy additional buying on the exchange platform for June and the nearby contracts. This has activated the futures market, and that in turn influenced the spot market also. There was no selling pressure on the sport market except for the Coorg pepper, which is also being offered at higher levels.
The domestic demand is also expected to go up in tandem with the futures market trend.
Normally, when the futures market is on the rise, everybody in the domestic market starts buying which pushes up the demand.
July contract on the NCDEX shot up by Rs 825 to close at Rs 30,425 a quintal. August and September soared by Rs 932 and Rs 927, respectively, to close at Rs 30,494 and Rs 30,475 a quintal.
Total turn over
Total turn over increased by 5,171 tonnes to 14,032 tonnes. Total open interest rose by 776 tonnes to 10,200 tonnes, showing good additional buying. July open interest moved up by 199 tonnes to 7,842 tonnes, while that of August and September increased by 466 tonnes and 59 tonnes, respectively, to 1,891 tonnes and 210 tonnes.
Spot prices in tandem with the futures market trend and lack of selling interest soared by Rs 500 to close at Rs 28,000 (ungarbled) and Rs 28,800 (MG 1) a quintal.
Indian parity in the international market has touched $7,000 a tonne (c&f) and remained marginally above other origins.
However, other origins are also said to be firmer under the umbrella held by the Indian market, they said.
According to an overseas report today indications from Vietnam were: 500gl at $5,500-5,540; 550gl at $5,800 - $5,850 and White double washed at $8,050- $8,100 a tonne (all fob) HCMC.
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