After joining the pepper market last week, the bulls have pulled down prices sharply.
The bulls are having difficulty handling very large volumes currently held. They promoted the market without any basic support and collected about 5,000 tons of pepper,
Local purchases are likely to increase after Monday as markets in Northern India are closed for the holiday. In addition, buyers are aware of the fact that new pepper sold dripping from next month is unlikely.
The next crop is estimated to be higher than the previous one. As a result, local dealers or speculators are only buying enough goods and hope to buy them at a lower price when the harvest season comes.
January contract was not put on the floor because it was a weak trading month. The December contract's expiry date will expire on January 5 and thereafter no stock will be available, with the exception of the speculative stock.
The hold of large volumes will lead to large costs, which may force the group to liquidate goods in January. At the same time, new crop shipments will be brought to the market in large quantities.
Therefore, there will be possibilities Excess situation in the market in January, market sources said.
“Pulling prices down and pushing prices up by speculators' intent shows that futures transactions are not entirely reliable,” the source said. The correction, though late, is understood to have been in search of alleged market manipulation since June.
There is a lot of conversion to December contracts and additional purchases.
Speculators seem to be catching up. Prices have not increased as they expected because the new crop is expected to be sold gradually from mid-December and the goods will be released steadily from January.
With this ability, local agents are buying just enough. In addition, systematic liquidation took place earlier by farmers and agents when prices were high at Rs 410 a kg.
Sources said the authorities were wrong with not putting the January contract on the exchange and saying it was a weak trading month.
According to traders and pepper growers, from mid-December to March, even to April is the time of peak harvest and therefore the amount of goods delivered will be very large. So failing to put the January contract on the exchange seems to be a clear sign of a lack of knowledge about the crop, ”the source alleged. Instead of the January contract, the July contract should be removed because it is a weak trading time.
From mid-December until March-April, India has the opportunity to export pepper until new crop of Vietnam is brought to the market.
It is likely that the price of Malabar pepper is still on par with that of other origins but still lower than the Indian pepper of over US $ 1,000 / ton. In addition, there is a choice from overseas markets to buy Malabar pepper with the addition of 200 – 300 USD / ton. If the current trend in the forward market continues with new quality shipments, it is likely that Indian parity will become more competitive in the international market.
At the same time, the weakening of the rupee against the dollar makes imports more expensive.
All contracts dropped sharply after a week of trading. November, December, and February contracts dropped by Rs 2,135, Rs 2,240, Rs 700, and closed the week at Rs 39,605 a quintal, Rs 38,745 a quintal, and Rs 35,640 a quintal.
Total turnover decreased by 2,176 tons and closed at 13,103 tons. It seems that this is a trading session to pull down prices because the bulls are controlling the market. Total open interest increased by 265 tonnes to 8,368 tonnes, indicating a maturity switch and additional purchases.
Closing on Saturday 17/11, spot prices parallel to the trend in the futures market decreased Rs 1,300 / quintal to Rs 38,000 / quintal with the bucket and 39,500 Rs / quintal with the selected type.
On the international market, the Indian special pepper price dropped by nearly US $ 1,000 / ton to US $ 7,450 / ton (C&F) for the European market and US $ 7,750 / ton (C&F) for the US market.
Source Business Line / Giacaphe.vn
Source link
