KOCHI, JAN. 18:
The pepper market dropped despite good domestic demand amid limited supply on Friday. Consequently, all active contracts closed much below the previous day’s closing.
It witnessed high volatility as the tug-of-war continued. “In fact, the market has been brought down artificially,” market sources told Business Line.
They said there was strong domestic demand as all the pipelines in the upcountry markets are empty. At the same time the arrivals have not yet picked up as expected.
Meanwhile, following reopening of the Tamil Nadu markets after the Pongal holidays, dealers from there are aggressively covering from the high ranges. They were even ready to buy good quality pepper from the farmers directly at Rs 400 a kg, they claimed.
This has squeezed the arrivals at the terminal market now. Total arrivals today was at 20 tonnes and it was traded at Rs 385, 390 and 400 a kg, depending on the quality, bulk density and area of production. Domestic dealers bought it.
Availability on the exchange platform continued to remain uncertain and therefore, the trade demanded that the regulator intervene and get the matter sorted out as the inordinate delay would negatively affect the pepper industry and trade.
Nearly 8,000 tonnes of pepper are locked up and they are in about 800 lots. Taking out samples from each lot for checking would take time. Similarly, the publication of the results would also take time, they said.
February contract on the NCDEX decreased by Rs 225 a quintal to close at Rs 36,745. March and April fell by Rs 325 each to close at Rs 34,295 and 33,705 a quintal respectively.
Total turnover decreased substantially by 1,198 tonnes to 962 tonnes. Total open interest increased by 177 tonnes to 3,357 tonnes and yet the market fell. Where as, the turn over on the IPSTA platform was at 998 tonnes today.
Open interest for February, March and April increased by 35 tonnes, 86 tonnes and 12 tonnes respectively to close at 1,767 tonnes, 1,102 tonnes and 359 tonnes.
Spot prices remained unchanged at Rs 38,200 (ungarbled) and Rs 39,700 (MG 1) a quintal despite good demand amid limited arrivals.
Closing prices on the IPSTA today for February, March and April were Rs 37,547, Rs 37,330 and Rs 37,431 a quintal respectively
Indian parity on the international market has increased following rise in the spot prices coupled with strong appreciation of rupee against the dollar. Jan at spot prices stood at $8,100 a tonne (c&f) while Feb was at $7,100 a tonne (c&f) and Mar at R6,700 a tonne (c&f), they said.
Source: Business Line