Pepper Futures Recover After Continuous Fall

Kochi: The pepper futures market last week witnessed a sharp fall due to bearish activities coupled with the decline in the prices of other origins.

However, the falling trend was arrested on Saturday following the reported deliberations by the Forward Markets Commission (FMC) that the quantity restriction on near-month position would be relaxed for genuine operators in the exchanges and similarly it would look favourably into the latest decision to reduce the outbound tolerance limits for pepper.

This has created bullish sentiments pushing up the prices of all the contracts last Saturday by Rs 353 to Rs 455 a quintal.

As a result the drop in the prices was reduced to Rs 762 to Rs 965 a quintal. On NCDEX, the fall was from Rs 762 to Rs 924 a quintal while on NMCE it was from Rs 863 to Rs 965 a quintal.

Turnover

The total turnover during the week on NCDEX fell by 2,182 tonnes to 83,220 tonnes from 85,597 tonnes. On NMCE, it dropped by 1,848 tonnes to 8,012 tonnes.

The total open interest during the week has declined by 547 tonnes on NCDEX to 19,210 tonnes. December position fell by 3,136 tonnes to 7,705 tonnes. However, January went up by 2,292 tonnes to 8,411 tonnes.

On NMCE, total open interest declined by 195 tonnes to 1,670 tonnes, while December position fell by 421 tonnes to 966 tonnes.

The spot prices in tandem with the futures market trend during the week also fell by Rs 600 a quintal to close at the weekend at Rs 12,700 (un-garbled) and Rs 13,300 (MG 1) a quintal.

High volatility

The high volatility in the prices had kept the domestic buyers also away.

There was no selling pressure as the growers/dealers were holding back due to the continuous decline in the prices.

In the international market, the US buyers were quiet as the market there was closed for ‘Thanks giving’ holidays.

International

Since the Indian parity continued to rule high above other origins, Indian value addition industry reported to have bought good quantities of pepper from Brazil, Vietnam and Indonesia. The growers as well as the traders here have raised apprehensions about part of its entry into the domestic market and that, they claimed, might depress the prices in the domestic market.

Harvesting of the new crop has begun in a small way and it is expected to pick up in the coming weeks.

Indications are that the output is unlikely to be more than that of the previous crop and rather it might be marginally lower.

In the global scenario, the availability is estimated to be less by around 55,000 tonnes as against the potential demand in 2008, hence, a significant fall in the prices in the coming weeks is unlikely as the major growers who are getting good prices for rubber and coffee could easily afford to hold back their produce in India and as well as in Vietnam and Indonesia.