Saturday, March 15, 2008

Volatility Gives Way To Liquidity Woes In Pepper Trade

Kochi: The pepper futures market witnessed high volatility on Friday mainly on buy and sell calls.

Fluctuations in the stock market are also influencing the market as most of the brokers are same and hence liquidity problem is affecting the futures market, market sources told Business line.

There were limited sellers। As the Indian parity remains lower when compared to other origins overseas buyers are now turning towards India and consequently enquiries are pouring in mostly for Mar/Apr shipments.

But, availability in the primary markets is very tight and as a result, exporters are covering exchange delivered pepper at prices below the spot prices। Availability is only in the exchanges as the speculators were liquidating.

It is a golden opportunity for the Indian pepper which is the cheapest at $4,000 a tonne (c&f) in the world market at present but for certain lacunae in the regulatory mechanism the trade is not able to capitalise on it, they said.

Vietnam Asta was quoted above $4,300 a tonne। Vietnam 500 GL was offered at $3,850 a tonne (c&f) West Asia. Brazil was offering B Asta at $3,900 at tonne (f.o.b.) and B1 at $3,800 a tonne (f.o.b.).

Vietnam was offering white at $6,050 a tonne while Muntok white was at $6,000 at tonne.

Contract Position

March contract on NCDEX shot up by Rs 222 a quintal on Friday to Rs 14,713। The increase in other contracts was from Rs 172 to Rs 304 a quintal.

On NMCE, March contract moved up by Rs 126 a quintal to Rs 14,600The rise in other contracts except July was from Rs 87 to Rs 233 a quintal, while July dropped by Rs 142 a quintal.

Total turnover on NCDEX on Friday fell by 3,065 tonnes to 12,870 tonnes, while on NMCE it dropped by 153 tonne to 1,537 tonnes.

Open interest up

Total open interest on NCDEX moved up by 42 tonnes to 21,431 tonnes। March position dropped by 13 per cent while April and May moved up by 61 per cent and 21 per cent respectively.

On NMCE, total open interest declined by 88 tonne to 1,674 tonnes.

Spot prices

Spot prices in tandem with the futures market trend moved up by Rs 100 a quintal to close at Rs 14,200 (un-garbled) and Rs 14,800 (MG 1) on Friday

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