Pepper futures market last week witnessed “squeezing and cornering of the short position holders” by long position holders and consequently August delivery shot up sharply. As weather conditions were totally unfavourable for the past few days ifresh depositing of the material in the exchange platform would be difficult for want of adequate and sophisticated processing facilities, growers said.

Meanwhile, the trade claimed that after depositing the material, it takes minimum clear seven working days for the stock to reach the electronic platform of the exchange and the account of the member broker to whom the clients transferred the stocks against their sales of August. As a result, good quantity of pepper is still yet to reach the exchange delivery platform, the trade said.

Transit time is too long even though it is claimed to be done under sophisticated electronic system. In the case of rubber, through other exchange where the volumes are much higher, the transfer is completed in every respects in less than 48 hours in spite of the fact that it is done through manual warehouse receipt system, they said.

Besides, many sellers appear to be not having stocks against their sales even after the regulator had given an opportunity of staggered delivery “totally in favour of the seller participants”, they said. These factorsresulted in Aug delivery trading firmer and closing higher almost every day last week while the nearby contracts traded easier and closing lower, they said.

August contract on the NCDEX last week increased by Rs 1,600 a quintal to the last traded price on Saturday of Rs 45,280 a quintal. September and October decreased by Rs 15 and Rs 345 respectively to the LTP of Rs 43,920 and Rs 44,155 a quintal.

Total turnover decreased by 22,870 tonnes to 15,277 tonnes. Total open interest dropped by 974 tonnes to 6,712 tonnes.

August open interest last week fell by 1,636 tonnes to 1,348 tonnes, while that of September and October increased by 375 tonnes and 275 tonnes respectively to close at 4,472 tonnes and 844 tonnes.

Spot prices remained unchanged on limited activities and thin arrivals at the previous levels of Rs 40,700 (ungarbled) and Rs 42,200 (MG 1) a quintal.

According to market sources, when the price of a single contract is pushed up artificially, the authorities should intervene by imposing heavy margin so as to arrest it. Besides, only genuine players should be allowed to trade in the last week of each monthly contract. Resolving all the small issues and streamlining of the market is necessary now, the trade here said.

Indian parity in the international market was at around $8,300 a tonne (c&f) Europe and $8,600 a tonne (c&f) USA.

The wide gap between the Indian parity and that of others for long is said to have prompted those selected markets world over which have been buying only MG 1 even at a premium price of $200-400 a tonne, to shift to other origins.

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