Pepper Futures Witness High Volatility

Kochi: Pepper futures market witnessed high volatility during the week and the prices, which were moving up and down, eventually went up at the weekend close.

Prices on the NCDEX during the week moved up by Rs 249 to Rs 613 a quintal while on NMCE it increased by Rs 277 to Rs 330 a quintal.

Total turnover dropped by 6,018 tonnes on NCDEX to 75,902 tonnes while on NMCE it moved up by 619 tonnes to 8,631 tonnes. Total open interest increased by 183 tonnes to 19,393 tonnes while on NMCE it moved up by 87 tonnes to 1,757 tonnes. Spot prices also went up by Rs 200 a quintal to close at Rs 12,900 (un-garbled) and Rs 13,500 (MG 1).

Indian Parity hovered around $3,600 a tonne (c&f) which remained above the prices of other origins and, as a result, no fresh orders were forthcoming.

Indian industry engaged in value addition and export is said to have bought substantial quantity of black pepper from other origins at lower prices.

The strong domestic demand from grinding and other industry following the commencement of the winter season has also contributed to the hike in the domestic price.

But there is apprehension that part of the imported pepper could enter the domestic market and depress the price here. Much of the domestic demand is met by direct sales from the primary markets. Spot selling at terminal market has been negligible.

In the international market, including India, the stocks are getting depleted and the next availability in India would be when harvesting of the new crop begins late this month.

Already the projections of the International Pepper Community (IPC) have indicated decline in availability by an estimated 55,000 tonnes in 2008.

Given this scenario, prices are unlikely to drop below $3,000 a tonne in the coming months, market observers here told Business Line.

According to the IPC report for the week, the black pepper market remained quiet at most origins. In India prices were down. Limited activities were recorded at the Commodity Exchange, particularly for January contracts, and prices at Kochi eased by around 3-5 per cent. In Sarawak, the market was also quiet and local prices eased marginally. FOB prices of Sarawak black were reported stable. In Sri Lanka, average price at pepper growing areas was SLRs 359.55 a kg, down marginally from SLRs 363 last week.

In Lampung and Vietnam also, the markets were unchanged and prices were reported stable as last week.

White pepper

The market for white pepper continued to be firm. Price in Bangka and Sarawak were reported the same as last week.

In Europe also, white pepper prices were stable.