The Hindu Business Line : Pepper futures decline on poor demand

Heat wave conditions prevailing in North India have weakened the domestic demand, which the traders anticipate would improve in the coming weeks as the monsoon is advancing to these regions.

Meanwhile, international players are waiting for the fall in prices after the Indonesian new crop hit the market.

Arrivals in the terminal market have become thin due to off-season while those who are holding stock do not seem to sell at the prevailing prices.

Spot prices on Tuesday were MG 1 Rs 7,300 and un-garbled Rs 7,000 a quintal respectively as against Rs 7,400 and Rs 7,100 a quintal last Saturday.

Futures prices were also down. June Rs 7,295 on Tuesday as against Rs 7,627 last Saturday. July Rs 7,562 (Rs 7,791), August Rs 7,813 (Rs 8,050), September Rs 7,932 (Rs 8,173), October Rs 8,083 (Rs 8,328), November Rs 8,148 (Rs 8,366).

As the harvesting is around the corner, Indonesia has reduced its prices from $1,450 to $1,375 a tonne and started taking positions. Now India with the parity of $1,650-1,675 has to compete with Indonesia, whose produce is comparable to MG 1.

However, Malaysia is not quite aggressive and its farmers are reluctant to sell below $1,500 a tonne. Brazil, where harvesting in fast approaching, is offering Sep/Dec deliveries at $1,375-1,425 a tonne.

Sri Lanka is quoting at $1,700-1,750 a tonne, because its light berries are exported to India at $2,000 a tonne for extraction by the oleoresin industry here. Vietnam was offering farm grade pepper at $1,250-1,275 a tonne and it is arriving in India in substantial quantity for value addition and re-export.

As the difference between the imported and domestic pepper is around Rs 10 a Kg, it is alleged, that around 50 per cent of the imported berries entered the domestic market, sources told Business Line.

The up-country traders are also interested in importing pepper from Sri Lanka as it help themsave sales tax in both purchasing and selling States.