Pepper market down on bearish activities .

Kochi, April 18 The high volatility in the Indian futures market caused by the “tug of war” between the bull and bear operators had dramatically pushed up and pulled down the prices in recent weeks.

As a result, the other origins which have been following strictly the futures market price to decide on their prices had been benefitted from it.

At the same time, as a consequence, Indian parity remained totally out priced.

Indonesian exporters instead of quoting the price have been telling potential buyers: “Will respond to firm bids”, in other words, some dollars below the Indian parity and they corner the orders.

International dealers with operations in Vietnam and India were spreading bearish reports about Vietnam and that in turn was creating bearish sentiments in the market here.

Add to this, sell calls and buy calls were keeping the market vacillating, trading sources told Business Line.

Meanwhile, Vietnamese farmers who wanted to take the advantage of the “dramatic upsurge in the prices” reported to have started selling of late, making the market easier there.

US buyers were, however, said to be acting cautiously, hoping that the current signs of easing might lead to some stability at lower levels, before they make up their mind to cover.

Overseas buyers, according to a report, were interested in light grades from Vietnam.

Turnover slips

During the week all the contracts on the NCDEX dropped.

April, May and June contracts fell by Rs 393, Rs 353 and Rs 338 respectively during the week to close at Rs 14,870, Rs 15,220 and Rs 15,495 a quintal on Saturday.

Total turn over fell by 43,278 tonnes to 36,437 tonnes. Total open interest moved up by 239 tonnes to 12,201 tonnes.

Spot prices fell by Rs 200 a quintal during the week to end at Rs 14,400 (un-garbled) and Rs 14,900 (MG 1) at the weekend close.Indian parity in the international market remained out priced at $3,575-3,675 a tonne (c&f).Prices quoted for different origins a tonne in dollar were MG1Asta – 3,650-3,750 (cf); Lampong Asta -will respond to firm bids; Vietnam 500GL – 2,875 (f.o.b); Vietnam Asta –3,425-3,450 (c&f); Brazil 500GL – 3,000-3,050 (f.o.b); Brazil 550 GL –3,100-3,150 (f.o.b); Brazil Asta – 3,250-3,300 (f.o.b); Sri Lanka 500GL – 2,950 (f.o.b); Spot MLVB Asta – 3,650-3,850 – ex warehouse New York/New Jersey; MLSV Asta – 3,650-3,800 (c&f) New York. Vietnam white pepper double washed – 4,575 (c&f).

Holiday trading

In the spot market also investors and interstate operators were buying from the terminal and primary markets at Rs 14,600-14,800 a quintal.

As the prices of pepper in Kerala are higher than that of Karnataka material from there was entering Wayanadu, traders said.

In Karnataka it was being traded at Rs 14,000-14,300 a quintal. Another problem raised by the trade last week was futures trading on State specific holidays such as “Vishu” in Kerala on April 15.

Conducting futures trading in commodities, which are Kerala specific such as pepper, rubber etc., delivery of which has to take place only in this State does not seem to be in the interest of the trade or the farmers. Because of the holiday all the financial institutions including the banks, mandis and the government offices used to remain closed and hence no money transactions could be made. The Regulator, in fact, needs to look into this aspect and take necessary steps, they said.

Another factor contributed to the decline was the apprehension that the strong rupee against the dollar would pave the way for increased imports of pepper from Vietnam as it would become a more profitable proposition given the availability of long rope, higher prices in the domestic market and shortage of the Wayanadan produce, they alleged. Availability in Kerala continued to be limited as the major growers were not ready to part with their produce at “non-remunerative lower levels”.

Source : Business Line