The Indian pepper futures market during the week witnessed high volatility due to alleged market manipulations. The futures contracts fell by Rs 151 to Rs 436 a quintal during the week. As a result, the May contract dropped by Rs 402 to close at Rs 12,685 a quintal on NCDEX. On NMCE it fell by Rs 519 a quintal to close at Rs 12,575.
May open interest fell by 959 tonnes to close at 3,298 tonnes on NCDEX while that of June increased by 1,174 tonnes indicating switching over to nearby positions during the week.
Spot prices
Spot prices also dropped by Rs 100 to close at Rs 12.500 (un-garbled)and Rs 13,000 (MG 1) at the weekend close on Friday as Saturday being a holiday on account of Buddha Purnima. There was no reason for the declining trend in the prices. The market seems to have become the ground for showing the muscle power of manipulators, market sources told Business Line.
On the other hand, as there is no spot pepper available, investors are also not interested. Thus, only manipulators are left in the futures market now.
A similar situation is there in the futures trading in jeera, chilli and turmeric. As the Indian parity remained at around $300-400 a tonne above other origins, no overseas demand is forthcoming, they said.
However, there was hectic activity by the domestic buyers who were covering aggressively so as to stock enough quantity of the material before the onset of the monsoon late this month or early next month. There is said to be a fear psychosis among the growers and dealers of a possibility of bold berries being seived out from imported Vietnam black pepper and sold as Wayanadan pepper which fetches a premium price of Rs 13,500 a quintal, in the domestic market.
Coorg scenario
The week witnessed selling pressure in the Coorg region of Karnataka where from north Indian dealers were buying good quantities of the material, albeit inferior, and moving out evading tax. 90 per cent of the Coorg produce is said to be marketed without paying tax.
Add to this, ‘no tax’ in Tamil Nadu also accelerated the selling pressure. Domestic buyers from Rajasthan, Madhya Pradesh and Delhi were covering from Karnataka large quantity evading tax.
International market
In the international market all the origins remained steady/unchanged.
Ecuador was said to be willing to compete with L Asta/V Asta.
The projection of a short fall in world pepper supply at the recently concluded Asta convention in the US might turn out to be more accurate when one goes by the report of sharp fall in the Brazilian pepper production in 2009 following the heavy rains in that country destroying pepper plantations.
The Brazil Pepper Trade Board (BPTB) quoting the President of Association of Brazilian Exporters of Pepper (ABEP), Mr Raimundo Nonato Moreira, said that the country’s “2009 crop is estimated to be 50 per cent less than that of the 2008 crop”.
Meanwhile, erratic weather in Kerala would have a negative impact on this year’s crop also. Destruction of vines due to the quickwilt disease in Kollam and Wayanad districts will continue to reduce the output further this year. Overall Indian output is likely to be lower this year also, said major growers in Wayanad and Kollam.
IPC REPORT
According to the International Pepper Community (IPC), prices in India was volatile during the last two weeks. Vietnam was the most active source supported by available material from recent crop coupled with more competitive and stable prices. In Lampung, local price was around IDR 20,000 a kg, with very limited activities. Local prices in Sarawak were reported up, while f.o.b. prices were down by $100 atonne. In Sri Lanka, average prices at pepper growing areas increased by five per cent.
WHITE PEPPER
The market for white pepper was calm. Local prices in Bangka and Sarawak moved up, while f.o.b. price for Sarawak white decreased by three per cent. In Vietnam, prices we reported stable as last week.
C&F prices of different origins quoted in $/tonne were: MG1 asta – 2,750-2,800; Lampong asta – 2,325-2,350; Sarawak brown label – 3,150; Ecuadorasta – 2,325-2,350 (limited); Vietnam asta -2,325-2,350; Vietnam 500 GL faq - 1,875 (f.o.b.); Vietnam 550 GL faq - $2,025 (f.o.b.); Brazilasta - 2,250-2,275 (f.o.b.) (nominal parity); MLSV asta - 2,400-2,425(c&f) Jul-Dec.
Vietnam white pepper was quoted at $3,200-3,250 a tonne (c&f). Muntokwhite pepper - $4,000 (c&f) ; Sarawak blue label - $4,150 (c&f) andEcuador white $3,850 plus (limited).
Source : Business Line