The Hindu Business Line : Pepper futures bounce back

Price rise in other producing countries coupled with persistently tight supply position in the world market has pushed up the pepper futures market on Friday.

The increase in price of other origins signals the potential severe shortage in the world market this year and as a result the prices are likely to move up further in the coming days, market observers told Business Line.

Indonesia has raised its price of (Lampong ASTA) black pepper to $2,250 a tonne (C&F) while Brazil has withdrawn from offering ASTA grade and now offering only B1 at $1,700 a tonne (FOB).

Vietnam is offering 500 GL at $2,000 a tonne while Indonesia was offering 500 GL at $1,900 a tonne. Indian parity as against these prices is at $2,275 a tonne (C&F).

Even at this rate material is not available. Some of the National Co-operatives are ready to buy NMCE delivered.

Some have sold nearby position to buy back October and selling in spot. It is a "blessing in disguise" that the domestic demand is weak and hence some of the exporters could buy from the North Indian markets. In the international market buyers are waiting and watching on the sidelines.

Speculative Buying

Meanwhile, in a bid to arrest speculative buying the NCDEX has imposed five per cent additional margin on bulls buying besides asking buyers and sellers to square up their positions by 3.15 p.m. August contract moved up by Rs 309 a quintal on Friday on NCDEX to close at Rs 9,720 from Rs 9,411, while on NMCE it went up by Rs 284 to close at Rs 9,739 a quintal from Rs 9,455 on Thursday.

The increase in other positions on NCDEX was from Rs 262 to Rs 340 a quintal while on NMCE it was from Rs 300 to Rs 402.

Turnover

The total turnover on NCDEX dropped by 22,527 tonnes to 21,198 tonnes from 43,725 tonnes on Thursday. On NMCE it declined by 2,880 tonnes to 4,781 tonnes from 7,661 tonnes. The total open interest on Friday on NCDEX was 17,871 tonnes as against 18,164 tonnes while on NMCE it was 4,483 tonnes compared to 4,461 tonnes yesterday.

The outstanding position for August, September and October was 6,523 tonnes, 4,204 tonnes and 4,456 tonnes respectively. In tandem with the futures market the spot prices moved up further by Rs 200 a quintal to close at Rs 9,300 (un-garbled) and Rs 9,700 (MG 1) on Friday.

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