Pepper prices continued to head north on rumours of potential default and reports of firmer markets overseas coupled with tight supply situation in Vietnam despite the beginning of harvesting there over a week ago.
Consequently, all the active contracts touched the second upper circuit levels at the closing. Good domestic demand has also aided the price rise.
Upcountry dealers who had exhausted their stocks hoping to cover after the beginning of the current season also started buying.
Thus there appeared a demand supply mismatch with the former outstripping the latter at the moment, market sources told Business Line.
The market opened on a firmer note and then declined in the mid forenoon session and touched the lowest levels.
Rumours spread by some of the players pushed up the price and then traded with volatility and then declined and moved up at the beginning of the closing session and touched the highest price.
In mid closing session it dropped and recovered again and ended in the closing minutes touching the second circuit levels.
Non-arrival of pepper here from the primary markets amid good buying activities by interstate dealers directly from the doorsteps of growers and primary market dealers in main growing districts of Idukki and Wayanad in Kerala at terminal market prices on cash and carry basis has also aided the bull operators to push up the market further.
March contract on NCDEX increased by Rs 1,285 a quintal to Rs 33,375.
Apr and May shot up by Rs 1,300 and Rs 1,305 respectively to close at Rs 33,765 and Rs 33,905 a quintal.
Total turn over increased by 1,070 tonnes to close at 11,787 tonnes.
Total open interest went up by 133 tonnes to 6,886 tonnes showing purchases.
Mar open interest dropped by 44 tonnes to 4,539 tonnes showing liquidation while Apr increased by 186 tonnes to end at 1,516 tonnes indicating additional buying.
May declined by 12 tonnes to 544 tonnes.
Spot prices also shot up by Rs 800 on tight supply situation amid good buying support and in tandem with the futures market trend to close at Rs 32,400 (ungarbled) and Rs 33,900 (MG 1) a quintal.
Indian parity in the international market has also increased corresponding to $7,100 a tonne (c&f) Europe and $7,400 a tonne (c&f) for the US.
According to an overseas report Vietnam market was steady at previous levels. The prices quoted were Faq 500 G/L $6,250 a tonne and Faq 550 G/L $6,550 a tonne (both fob HCMC).
Lampong Asta was at $6,950 a tonne CFR New York and sterilized was offered at $330 a tonne extra, it added.
As far as Brazil is concerned, the report said “only one quote was there after the Carnival holidays at $6,600 a tonne (fob) for B1 560 G/L. European market was reportedly quiet.
Vietnam farmers are reportedly not very keen to sell now and the current crop is estimated at 1.2 lakh tonnes, another report claimed.