The Hindu Business Line : Pepper futures fall on liquidation, low demand

Kochi, Oct.20 Pepper futures witnessed high volatility on Tuesday, the day the October delivery was to mature. The volatility, according to market sources, was due to the entry of those trying to create last day position, which is not allowed in commodity-specific exchanges.

In fact, “during the last 48 hours, the trading has to be restricted between the position holders so as to avoid such volatility, only then can the market be realistic and genuine,” market sources told Business Line.

Pepper futures however, later closed marginally below the previous day’s closing on bull liquidation and a slow domestic market. Bulls holding long positions were liquidating. Bearish reports also contributed to the declining trend, they said. Confusing and misguided reports from other origins about thin availability also kept the market in some uncertainty, they said.

On the other hand, the domestic market continues to remain slow, probably because festivals this year fell earlier by about three weeks and second, anticipating a drop in the domestic price due to possible entry of pepper imported from Sri Lanka at low price under advance licence for value addition and re-export. Domestic buyers were in wait-and-watch mode.

October contract, which matured on Tuesday, declined by Rs 12 to close at Rs 13,799 a quintal. November and December dropped by Rs 101 and Rs 83, respectively, to close at Rs 13,915 and Rs 14,100 a quintal.

Turnover

Total turnover increased by 3,658 tonnes to close at 4,728 tonnes. Total open interest declined by 31 tonnes to 9,787 tonnes.

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