Pepper market last week witnessed a bearish sentiment on reports of alleged financial problems in the National Spot Exchange Limited (NSEL), which, in turn, has led to a panic situation in the market. Many of the players who had opted for trading on the NSEL so as to make very high returns are claimed to have withdrawn from the market now after having allegedly burnt their fingers.
Besides, the stock position at the NSEL, according to reports, as on July 26 was projected at 820.50 tonnes in Saharanpur (UP). These phenomena coupled with good availability from Sri Lanka at competitive prices said to have aided the market to decline last week. Good quantity was reported to have been exported to several South-East Asian countries.
The bearish sentiments built up in India despite reports of Vietnam, the top producer in the world, making huge purchases from Sri Lanka. Multinational companies are claimed to have bought pepper from Sri Lanka for processing and re-export from their processing plants in Vietnam, which signals the depletion in the Vietnamese stocks, market sources told Business Line. Good quantity of 500 GL pepper is said to have exported to India also at $5,800 a tonne cif Kochi. The landed cost is worked out at Rs 358 a kg and remained cheaper, they said.
Arrivals have been very thin and consequently at the weekend only one tonne was traded. People do not seem to have interest on the commodity specific regional exchange as the members are claimed to be apprehensive about the performance of its software, trade sources said.
Due to very bad road conditions following the onset of heavy South-West monsoon rains the truck freight has been allegedly doubled and that was pointed out as one of the reasons for the disruption in arrivals. Hence there were no arrivals from Idukki and Wayanad. Whatever material arrives has high moisture content and is infested by fungus. Even though Ipsta has been allowed to raise its daily fluctuation limit from Rs 500 to Rs 1,000 a quintal, it does not seem to be interested in implementing it probably due to lack of interest among its operators, IPSTA sources alleged.
All the active contracts fell on the national exchange last week. Aug, Sep and Oct contracts decreased by Rs 330, Rs 644 and Rs 435 respectively to Rs 41,180, Rs 41,400 and Rs 41,390 a quintal. Total turnover increased by 64 tonnes to 264 tonnes. Total net open position moved up by four tonnes to 87 tonnes.
However, spot prices remained unchanged last week end on limited activities, but matching demand and supply, at the previous levels of Rs 39,000 (ungarbled) and Rs 41,000 (garbled) on limited activities.
Indian parity in the international market was at $7,925 (c&f) Europe at $7,175 a tonne (c&f) US. Europeans are on summer holidays and hence no activities were reported from there. Non-availability of labour because of the holy month and heavy rains is said to have hampered harvesting in Indonesia.