The Hindu Business Line : Pepper futures decline

The market witnessed high volatility with the prices falling sharply in the forenoon and then shooting up to fall in the afternoon and to close marginally below Thursday’s closing.

This kind of volatility created by the operators has resulted in the people loosing confidence in the futures market, traders alleged.

The people in the international market are yet to digest this kind of fluctuations, they said.

Domestic demand has picked up but the dealers and growers are said to be worried about the arrival of Sri Lankan pepper at $2,650 a tonne (c&f) Kochi, which might be available in the internal market at Rs12,500 – Rs12,600 a kg. According to them the new generation exporters in Sri Lanka who are said to be aggressive were offering at this rate.

Meanwhile, some buying estimated at around 25 to 30 tonnes of farm grade pepper have been traded in the spot market. Some processor to exporters were also covering and this phenomenon has kept the spot prices steady at previous levels. November contract dropped by Rs115 to close at Rs14,148 a quintal. December and January fell by Rs124 and Rs31 respectively to close at Rs14,321 and Rs14,554 a quintal.

Total turn over fell by 2,098 tonnes to 5,941 tonnes while total open interest moved up by 89 tonnes to close at 9,510 tonne. November open interest fell by 299 tonne while Dec and Jan moved up by 342 tonnes and 32 tonnes showing switching over from November to nearby positions.

Spot prices remained unchanged on buying support at Thursday’s levels of Rs13,500 (ungarbled) and Rs14,000 (MG 1). Indian parity in the international market was at $3,200 tonne (c&f) as the rupee strengthened against the dollar. Indian parity remained competitive if the prices quoted by the other origins are taken as real, market sources pointed out.

According to an overseas report Vietnam market was “getting tighter and firmer” with business for FAQ 500 GL November delivery locally at equivalent $2,700 a tonne and December at $2,800 a tonne (free on board) basis. It gives the impression that there is a likely tightness later this year, the report said.

Origin sellers in Indonesia were reportedly offering L Asta at $3,065 a tonne (fob). Brazil remained steady at B Asta $2,800-$2,850 a tonne (fob) level. Growers are reluctant to offer lower.

Prices quoted for different origins a tonne c&f New York: MG 1 Asta: $3,250-$3,350; Vietnam Asta $3,150; Lampong Asta $3,150 - $3,300; Ecuador Asta $3,100 (very limited quantity); Brazil Asta $2,825 (fob). Brazil 500GL and 550 GL $2,650 and $2,750 a tonne (fob) respectively. White pepper prices quoted were: Vietnam double washed $4,250; Muntok $5,000-$5,100 and Brazil: $4,700 a tonne (fob).

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