Kochi: Tight pepper supply position even after the beginning of harvesting, albeit delayed, has led to active buying, pushing up the prices in the futures market during the week. Market witnessed high volatility and high volumes were traded as evident from the turnover.
Domestic demand
Untimely rains have delayed harvesting, which normally commences in November/December. Though the new crop has started trickling in, there are no signs of supply picking up yet. Meanwhile, whatever is harvested is picked up by upcountry buyers directly from the primary markets. There is said to be good domestic demand now, mainly because of the severe cold in the North Indian states. Production is also estimated to be around 50,000 tonnes.
Reports from southern districts of Kerala predicted a drop of 30-40 per cent in that region. The oleoresin industry could manage to buy about 300 tonnes of light berries from there.
These factors have contributed to the rise in prices, market sources told Business Line. The scenario has led to bull operators becoming aggressively active. As the futures rose, investors were buying spot and selling futures. Buy calls from the technical analysts of brokers also contributed to the upsurge.
The increase in prices of all contracts during the week on NCDEX was from Rs 531 to Rs 783 a quintal. January contract closed at Rs 13,990 a quintal on Saturday.
On NMCE the increase in all the contracts was from Rs 598 to Rs 726 a quintal.
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Total turnover on NCDEX shot up by 23,762 tonnes during the week to close at 80,778 tonnes. However, the turnover for January dropped by 2,581 tonnes while Feb shot up by 20,685 tonnes.
On NMCE, total turnover moved up by 499 tonnes to 7,137 tonnes.
Total open interest on NCDEX increased by 1,543 tonnes to 20,145 tonnes. January position fell by 1,697 tonnes while that of February and March moved up by 1,414 tonnes and 1,274 tonnes respectively.
On NMCE, total open interest moved up by 35 tonnes to 1,393 tonnes.
Spot prices on good buying support and in tandem with the futures market trend went up by Rs 300 a quintal at the weekend — Rs 13,200 (un-garbled) and Rs 13,800 (MG 1) a quintal.
Wait and watch
Given this trend international market has gone on a wait-and-watch mode to see how the other origins are going to react to the rise in Indian prices. European market was reportedly quiet. World market trend would be known by Tuesday as many of the players are yet to become active after the holidays. Squeeze in supply is likely to continue till the new Vietnam crop arrives in the market in March/April.
Indian parity has gone up to $3,750-3,800 a tonne (c&f) at a time when the harvesting of the new crop has begun. The current scenario is reminiscent of the situation in Vietnam early this year when prices ruled high at $4,000 a tonne at the beginning of harvesting there in March/April 2007, they said.
Domestic demand
Untimely rains have delayed harvesting, which normally commences in November/December. Though the new crop has started trickling in, there are no signs of supply picking up yet. Meanwhile, whatever is harvested is picked up by upcountry buyers directly from the primary markets. There is said to be good domestic demand now, mainly because of the severe cold in the North Indian states. Production is also estimated to be around 50,000 tonnes.
Reports from southern districts of Kerala predicted a drop of 30-40 per cent in that region. The oleoresin industry could manage to buy about 300 tonnes of light berries from there.
These factors have contributed to the rise in prices, market sources told Business Line. The scenario has led to bull operators becoming aggressively active. As the futures rose, investors were buying spot and selling futures. Buy calls from the technical analysts of brokers also contributed to the upsurge.
The increase in prices of all contracts during the week on NCDEX was from Rs 531 to Rs 783 a quintal. January contract closed at Rs 13,990 a quintal on Saturday.
On NMCE the increase in all the contracts was from Rs 598 to Rs 726 a quintal.
• Check out our Yearender Special
Total turnover on NCDEX shot up by 23,762 tonnes during the week to close at 80,778 tonnes. However, the turnover for January dropped by 2,581 tonnes while Feb shot up by 20,685 tonnes.
On NMCE, total turnover moved up by 499 tonnes to 7,137 tonnes.
Total open interest on NCDEX increased by 1,543 tonnes to 20,145 tonnes. January position fell by 1,697 tonnes while that of February and March moved up by 1,414 tonnes and 1,274 tonnes respectively.
On NMCE, total open interest moved up by 35 tonnes to 1,393 tonnes.
Spot prices on good buying support and in tandem with the futures market trend went up by Rs 300 a quintal at the weekend — Rs 13,200 (un-garbled) and Rs 13,800 (MG 1) a quintal.
Wait and watch
Given this trend international market has gone on a wait-and-watch mode to see how the other origins are going to react to the rise in Indian prices. European market was reportedly quiet. World market trend would be known by Tuesday as many of the players are yet to become active after the holidays. Squeeze in supply is likely to continue till the new Vietnam crop arrives in the market in March/April.
Indian parity has gone up to $3,750-3,800 a tonne (c&f) at a time when the harvesting of the new crop has begun. The current scenario is reminiscent of the situation in Vietnam early this year when prices ruled high at $4,000 a tonne at the beginning of harvesting there in March/April 2007, they said.
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