Last week, Indian pepper market continued to witness The struggle between bulls and bears led to strong market volatility.
The market is currently experiencing tight supply situation and continuously increasing prices. During the week, because there were very few pepper being traded in the spot market, the price of pepper was pushed up.
Transactions took place in the context of the price of all contracts were limited supply due to not being delivered in the warehouse of the term floor.
Delivery at the warehouse was delayed after about 8,000 tons of pepper were kept in stock for allegedly detecting unauthorized preservatives. Food safety agencies have sealed warehouses and goods to be circulated only after each batch is tested by designated laboratories.
Traders said new arrivals from major markets were scarce. According to dealers, they are buying additional volume for themselves and will only sell when the price reaches over Rs 400 / kg. Some farmers are doing the same.
Another problem is that there is currently a shortage of professional workers for harvesting. In some areas, the peppercorns are ripe and dry on the tree and the peppercups begin to fall. Some workers are used to pick up the dried berries that fall on the ground. This crop has at least 50% of the crop was lost. Thus, there was a tightening of supply. At the same time, between December and March in northern India is the peak season, usually with a boom in demand. The shortage of real stock available at the time led to skyrocketing prices in the spot market.
Even if the price goes up to Rs 414 / kg, it is very difficult to get goods on the spot, trade sources said. Currently, the monthly demand of the domestic market is about 5,000 tons of pepper but the product is still not available.
Unfavorable weather conditions also impact the market. In some areas, drought makes pepper dry. If this situation continues, the output of the next pepper crop may decline sharply.
Last week, on NCDEX, February and April contracts increased while March had a slight decrease. For the whole week, February increased by Rs 685 to close at Rs 38,870 / quintal (equivalent to USD 7,306 / ton), April increased by Rs 310 to Rs 35,635 / quintal (equivalent to USD 6,698 / ton) while March decreased. 10 Rupees to Rs 36,935 per quintal (equivalent to 6,942 USD / ton). (1 USD = 53.2020 Rupees)
Total turnover increased by 3,947 tons to 11,129 tons. Total open interest increased by 300 tonnes to 3,599 tonnes.
Spot prices increased by Rs 800 to close at Rs 39,900 a quintal (equivalent to US $ 7,500 per tonne) for the un-classified and Rs 41,400 a quintal (US $ 7,782 per tonne) for the MG1 selected grade at the weekend session. Indian parity in the international market was USD 8,300 per tonne (c & f) for spot delivery.
Favorable exchange rates for imported goods may boost the import of pepper from Vietnam in the coming days if the rupee continues to strengthen.
Source Business Line / Giacaphe.vn
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