For the past few weeks, confusion prevails in the pepper market in view of the uncertainty over the availability of the material.

Based on the speculative assessments of both bull and bear operators the market is being pushed up and pulled down. Last week the bear operators had the upper hand and consequently all the active contracts showed a sharp fall.

There was substantial decrease in the volume. Liquidation was also moderate.

Availability in India, as it appears so far from the arrivals, is tight. Fresh pepper arrivals from the high ranges of Kerala is very thin. Meanwhile, a good portion of pepper appears on the primary markets of Wayanad is said to be from Karnataka.

Low bulk density pepper from Sakleshpur and Chikmagalur region of Karnataka was being offered at Rs 370-375 a kg delivered anywhere in India in recent days. But, the sellers are said to be hesitant to offer now at these rates and have raised the price to Rs 380-385 a kg. Pepper from Kodagu region is of high bulk density and bold is being pushed into Wayanad, one of the major pepper growing regions of Kerala bordering Karnataka and offered at Rs 390-395 a kg, market sources told Business Line.

Slack demand

Domestic demand has slowed down as the traders have closed down as the financial year is coming to an end. Those who want the material urgently are buying while those who want money are selling but on cash and carry basis, they said. Buying activities are expected to pick up from early April as the industrial buyers are expected to become active. The supply situation continues to be unimpressive and Vietnam is the only producer having the material. But, the arrivals there have not reportedly shown any significant pick up so far.

A report from overseas last weekend said “Pepper market remains indecisive. In general the trade is forecasting higher prices, which is largely based on the assumption that supply is still falling short of demand during 2012”.

It attributed this argument to “low stocks in Brazil, India's latest position as a net importer, Indonesia not being a factor of importance at least until July/August and Vietnam at best having a crop that is equal to last year”.

Last week all the active contracts fell as the bear operators were in the driving seat almost all the days except for one day.

Apr, May and June contracts fell by Rs 2,410, Rs 2,350 and Rs 2,115 respectively to the last trading price of Rs 41,700, Rs 42,470 and Rs 43,000 a quintal at the end of trading on Saturday.

Total turn over decreased by 18,230 tonnes to close at 48,206 tonnes. Spot prices fell during the week by Rs 2,400 a quintal to close at Rs 38,500 (ungarbled) and Rs 40,000 (MG 1) a quintal. Indian parity in the international market was at $8,450 a tonne (c&f) for Europe and $8,750 a tonne (c&f) for the US.

Related Topics