Pepper market last week was under the grip of a bearish sentiment created by various factors and consequently all the active contracts ended much below the previous weekend closing.
Reasons attributed to the downward trend were first a possible release of an estimated 6,000 tonnes of pepper following the withdrawal of a case filed in the Indore Court.
Second, there appeared some selling pressure from the plains of Kerala.
There were also reports of easier market in Vietnam coupled with inquiries floating in Sri Lanka from Indian importers for 525 -550 GL pepper.
Consequently, upcountry demand, which was being met mainly by supplies from Karnataka and northern region of Kerala, also slowed down on anticipation that the prices would fall.
All these factors led to the declining trend last week.
Besides, West Asia-based dealers were also covering through their agents from the plains and the high ranges, they claimed. Much of the pepper arriving was of low bulk density having high moisture content due to the unfavourable weather conditions prevailed throughout the week.
Processing cost, therefore, was claimed to be high at Rs 40 a kg.
The processing was also possible only by those processors who have modern facilities, market sources said. High bulk density pepper was, however, in great demand and Tamil Nadu-based interstate dealers were covering it from the high ranges (Idukki district) of Kerala on cash and carry basis. Meanwhile, sellers of Rajkumari (Idukki) pepperwere said to be showing interest to sell at Rs 420. But, the buyers were reluctant to buy from the declining market.
During most of the days last week, Indian parity remained competitive in the international market.
But, the high volatility in the exchange rates placed the exporters in a difficult situation forcing them not to make any commitments with overseas buyers. Later in the week, other origins which were reportedly firmer earlier in the week, were said to be showing an easier trend, especially Vietnam.
Vietnam is still the cheapest origin fromcost perspective. Market in Indonesia continues to be extremely tight with limited offers coming through.
On the NMCE, October and November contracts fell sharply by Rs 1,370 and Rs 962 a quintal respectively to Rs 42,909 and Rs 43,465. Total open interest declined by three tonnes to 33 tonnes. Total turnover moved up by 60 tonnes to 186 tonnes.
Spot prices fell by Rs 600 to close at Rs 40,300 (ungarbled) and Rs 42,300 (garbled) on limited activities. Indian parity in the international market was vacillating between $7,100 and $7,250 a tonne (c&f) for the Europe and $7,350 and $7,500 a tonne (c&f) for the US because of the fluctuation in the rupee against the dollar, they said.