Buying Interest Keeps Pepper Futures In Forward Run

Kochi: The pepper futures market continued its upward run for the second week with prices increasing by Rs 1,038 to Rs 1,432 a quintal. In tandem with the futures market trend here, prices at other origins were also moving up.

The market during the week witnessed wide and wild fluctuations with the bulls pushing up the prices and the bears pushing it down. Many were switching over positions.

The revision in penalty for defaulters was also allegedly putting buyers at a totally disadvantageous position. The spot prices of NCDEX have become relevant now following the revision of penalty, market sources told Business Line.

Turnover

Total turnover on NCDEX shot up by 62,754 tonnes during the week to 1,42,538 tonnes while on NMCE it went up by 11,729 tonnes to 18,803 tonnes. Total open interest on NCDEX has increased by 1,335 tonnes to 21,487 tonnes.

October position fell by 2,384 tonnes while November and December moved up by 1,275 tonnes and 2,068 tonnes respectively. On NMCE total open interest went up by 258 tonnes to 2,437 tonnes.

Physical availability remained tight following good domestic demand in view of the winter months and the festival season. Large quantity of pepper was moving out from the primary markets to North Indian destinations at terminal market prices. Exporters were covering from the Exchanges. Squeeze in supply could push up the prices in the coming days.

Black pepper

According to International Pepper Community (IPC) report for the week, the Indian black pepper market eventually showed improvement and prices moved up. Strengthening Indian rupees against the US dollar in addition to current issue of low carry-over has pushed prices higher.

Spot price of Malabar black increased by 6-8 per cent compared to last week. At the Commodity Exchange, trading was on an increase. Future prices for October-March 2008 increased significantly by around 11-13 per cent.

In Lampung, the average prices of pepper at farm level were reported stable at around IDR24,000 a kg. In Sarawak, local price of black pepper eased further by 1 per cent, while for FOB price dropped by $400 to close at $3,500 per tonne. In Sri Lanka, the price was stable at SL.Rs330.15 a kg.

White pepper

In Bangka local price of Muntok white eased further to around IDR 36,000 a kg. In Sarawak, local prices were relatively stable, while FOB price eased by 1 per cent.

Pepper exports from Vietnam during January -August 2007, have dropped by 33 per cent from that of the corresponding period last year and it shows the decline in availability there, market observers here pointed out.

Meanwhile, Brazil Pepper Trade Board news said that US buyers had started to buy ASTA grades as well as Europeans on FAQ grades.

Major activity has been with Indonesia and some trading was seen with Brazil and Vietnam. It is reported that India also bought ASTA/FAQ pepper.

Steady demand from Europe for FAQ grades was also seen.

The Indonesian sellers are becoming less aggressive as they are seeing demand and have been selling off their stock positions, it said.

The Brazil market which declined about 10 days ago is showing signs of firmness due to increased demand and limited arrivals from farmers.