Last week, the pepper futures market witnessed a mixed trend with the near-term contract being relatively stable while other contracts increased slightly at the end of the week.
In the spot market, prices have fallen although supply may be tight on top of a downtrend created by apprehension about the amount of pepper held in storage coming to market.
Investors with pepper stock at the farms were reported to be in need of liquidation at the end of last week. They are asking about the selling price of pepper. This phenomenon seems to have created a sense of fear in the market when it is estimated that 300 – 500 tons of held pepper will be released.
The amount of goods delivered was very small due to the incessant rain in all major growing areas. Due to the rains, pepper processing at this time is not possible for the majority of processing plants without modern drying facilities, market sources told Business Line.
Meanwhile, other producers offer pepper at a lower price. Even Sri Lanka is offering 520 Gr/l pepper at $5,859/ton (c&f) in Kochi. But the collectors still do not move.
Dealers in major markets sold pepper throughout the week perhaps because of the ability to support each other and lead to lower support prices in the spot market.
During the week, the contracts that are trading on the NMCE market have almost stabilized with marginal decline. The August contract fell Rs 20, to close at Rs 40,606 per quintal (equivalent to $6,843 per ton). September and October contracts rose by Rs 236 and Rs 182 respectively to close at Rs 40,512 per quintal and Rs 40,510 per quintal (equivalent to 6,827. USD/ton). ( 1 USD = 59.34 Rupees )
Spot prices fell Rs 500 per quintal throughout the week and closed at Rs 38,000/quintal ($6,404/ton) for bucket pepper and Rs 40,000/quintal ($6,741/ton) for select pepper, due to demand is low and the amount of pepper delivered is limited.
Currency fluctuations during the week have made specialty pepper prices higher and hence Malabar pepper prices completely higher in foreign markets. Other manufacturers are offering them at much lower prices.
Indian special pepper in the international market remained at $6,950/ton (c&f) for goods to Europe and $7,200/ton (c&f) for goods to the US. While Europe is getting ready for the summer holidays, purchasing activities are slowing down.
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