Over the past week, the Indian pepper market continued its uptrend with support for domestic buying amid limited supply coupled with vibrant market activities. High demand for the festival Pongal makes dealers in Tamil Nadu actively seeks to source goods directly from farmers at market futures prices.
Besides, a good quantity of pepper is retailed to pilgrims returning from Sabarimala. The supply of pepper from Kerala was not as expected as the worsening weather prevented the harvest.
The result of the competition between the bulls and the bears is the high volatility of the market as both sides try to push the price up and down.
The business statistics report showed that, as of Friday, January 11, the February term had 2,552 tons of goods traded, accounting for more than 81% of the trading volume. In the last session of the week, February futures also accounted for more than 80% of transactions and open interest was correspondingly lower, trade sources said.
The gap between futures and spot prices continued to widen from last week. As a result, some traders on the exchange had to buy hedges and leave the market.
The huge difference between February futures prices and spot prices will remain in the long run.
A very large amount of pepper, estimated at 8,000 tons, owned by speculative corporations is still sealed in the warehouse of the floor, so far it is not clear how to handle it. On the other hand, the January term was not put on the exchange because the exchange thought it was a weak trading month.
Meanwhile, there are some high-quality second-hand goods that have been stored in warehouses for 7-8 years and are sold by investors to dealers in Kumili for Rs 390/kg to retail to Sabarimala pilgrims. Normally, pepper that is stored for a long time will lose its aroma and spicy taste, so it will not be exported.
Trade, therefore, recommends that managers switch pepper stock annually if there is no facility for stable temperature storage.
Demand for pepper is great but currently unavailable. Someone ordered pepper from Idukki at a high price of Rs 380/kg but still no seller.
Dealers have directly bought new pepper crops from farmers at the price on the futures floor.
In the last week, on the NCDEX-Kochi exchange, all the contracts are trading up. The February, March and April contracts rose all by Rs 610, Rs 460 and Rs 290, respectively, to close the week at Rs 35,980 per quintal, Rs 34,765 per quintal and Rs 34,315 per quintal (equivalent to 6,564 crore). USD/ton, $6,343/ton and $6,261/ton). (1 USD = 54,810 Rupees).
Total trading volume increased 4,180 tonnes to 12,209 tonnes, while aggregate open interest fell 186 tonnes to close at 3,444 tonnes.
Spot prices, in line with the futures market trend, rose Rs 300 on Saturday to close at Rs 37,700/quintal ($6,878/ton) for bucket pepper and Rs 39,200/quintal (equivalent to Rs. equivalent to 7,152 USD/ton) for MG 1 selected pepper due to good buying support.
Indian specialty pepper on the international market with spot prices for January stands at $7,700/ton (c&) and is still negotiable. However, February delivery at futures market prices is currently $6,800/ton for Europe and $7,000/ton for the US and remains largely competitive. Vietnamese pepper Asta and Lampong Asta are at $7,000/ton while MLV Asta is at $6,950-7,000/ton for February/March delivery.
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