In the last week, the pepper market has seen limited activity but with high volatility and slight price increases. This defied concerted efforts to pull prices down, buying activity over the weekend.
On the exchange, short holders have returned to selling while long holders have liquidated including spot goods. Exporting enterprises have also purchased goods on the spot.
Exporters have left both the exchange and the spot market to make transactions. Meanwhile, short holders have offered attractive prices to long holders, market sources said. Difference between April delivery and pepper price spot is shrinking and is likely to converge when ripe. According to the trade, on Friday’s exchange the selling price has increased by Rs 300 per quintal compared to the purchase price and therefore the bid and ask prices are both outside Rs 300.
The April contract expires on April 18, two days before its normal expiration on the 20th. Since the 20th falls on a Saturday, an additional 19th is needed, but it’s also a holiday for the Ramnavami festival.
The downtrend continued in the pepper market as sellers tried to pressure buyers to liquidate.
Right amount of goods
Local purchases continue to remain moderate in Kerala and in abundance in Karnataka. Karnataka pepper has been moved to all over the country and especially to the southern market.
Dealers from Karnataka bought high density pepper from Idukki Kerala district mixed with their pepper to make 550 – 560 GL and offered at Rs 340/kg. Pepper above 500 GL was sold for Rs 325-330/kg and pepper under 500 GL at Rs 310-315/kg, dealers said.
Allowed impurities such as slurry are also mixed with pepper to sell to those who want very cheap goods. Therefore, there is a great need for the criterion. Pepper from the main production centers in Karnataka, such as Chikmagaluru, Sakleshpur, Virajpet and Madikeri in Karnataka, were organized to be shipped to all over the country.
Incoming shipments from major markets have shrunk as interstate pepper dealers have been buying directly from growers or from primary market dealers at cash futures prices and purchased at basis.
Much of the country’s pepper demand is met by Karnataka supplies at relatively low prices. But high-density pepper is rare, trade sources said.
During the week, the April and May contracts on NCDEX rose slightly by Rs 325 and Rs 25 respectively to close at Rs 36,200 per quintal and Rs 35,760 per quintal (equivalent to $6,627/ton and $6,547/ton). April delivery has converged with Saturday’s spot price. ( 1 USD = 54,6209 Rupees )
Total trading volume fell 1,511 tons to 3,894 tons at the end of the week. Total open interest fell 35 tons to 1,758 tons.
On Saturday, April 13, spot prices fell by Rs 100 per quintal to close at Rs 34,700 per quintal ($6,353 per ton) for bucket pepper and at Rs 36,200 per quintal ($6,627 per ton) for pepper. MG1.
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