At the end of the week, the pepper futures market continued to witness the tug-of-war between the bulls and the bears. Speculators did not rely on fundamentals to support action. And as a result, the market was highly volatile with prices moving up and down according to the arbitrary and imaginary ways of speculators.
One of the current trends in the futures market is speculation that the shortage of pepper being reflected in futures has been kept low in recent days. .
The newly delivered shipment is no longer available to choose from. Last week, weather conditions in many harvesting areas were not favorable.
The majority of pepper comes from Pathanamthitta, Kollam and Thiruvananthapuram districts, which may be of slightly lower quality than high-priced pepper.
During the Pongal festival period, a number of improvements have been made to new arrivals in the futures market. However, the demand from Tamil Nadu after the holidays is quite high. Shipping lines in the domestic market are mostly empty. Therefore, the demand from these regions is strong.
The rupee has strengthened against the USD and the rising price has pushed up Indian special pepper in the international market significantly. Therefore, the price of goods delivered in January and February is about 7,000 USD/ton, a price that cannot compete with other sources.
However, March delivery prices were competitive at $6,750/ton. But exporters are not said to be in a position to make physical deliveries amid volatile prices. While January delivery is 8,100 USD/ton and February is about 7,100 USD/ton.
Meanwhile, the Tamil Nadu market has reopened after the Pongal holiday, and dealers there are actively buying goods at high prices. Even they are willing to buy directly from good quality pepper growers for up to Rs 400/kg.
This phenomenon has forced the futures market. On Saturday, about 20-25 tons of new season pepper was traded at Rs 380, 390 and Rs 400 depending on quality, weight and production area. Local pepper traders bought this item.
In the last week, the February contract soared while the months to come there was a decline. February increased by Rs 1,490 to Rs 37,470/quintal (US$6,963/ton), while March and April decreased by Rs 25 and 360 to Rs 34,740/quintal ($6,456/ton) and Rs 33,955/ton respectively. quintals (equivalent to 6,310 USD/ton). ( 1 USD = 53.8132 Rupees )
Revenues fall
Total trading volume fell 792 tonnes to close at 11,417 tonnes. Total open interest fell by 123 tons to 3,321 tons.
On top of strong demand amid tight supply last week, spot prices rose Rs 800 per quintal to close on Saturday at Rs 38,500 per quintal (or $7,154 per metric ton) for undigested grade and Rs 40,000 per quintal. (equivalent to 7,433 USD/ton) grade MG1.
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