The pepper market witnessed high volatility on Wednesday and closed in a mixed trend following good liquidation and switching over in the futures, while aggressive buying interest was seen in the spot market which pushed the MG1 price to the historic Rs 326 a kg level.
The market opened on a rising trend and hit the highest price of the day at the opening and then started sliding with high volatility and hit the lowest price of the day in the forenoon. After that it again moved up and fell and remained highly fluctuating and eventually September ended marginally above the previous day closing while October and November declined slightly.
As the futures prices were ruling high exporters were covering aggressively and actively farm grade pepper from the spot market while investors were buying exchange pepper at Rs 3 above the September delivery price. Overseas demand appears to have made the exporters buy actively. Even Vietnam processor-exporters were said to be covering farm grade pepper from India to meet their export commitments, market sources told Business Line.
As the spot prices have been ruling above Rs 300 a kg, national and State-level cooperatives and dealers were showing interest to sell.
Processors were also buying for processing and depositing in the exchange, they said. An estimated 100 tonnes of pepper is reported to have been deposited in the exchange when there was sunshine for one day last week, they said.
As the prevailing protracted wet conditions are unfavourable for pepper, the quality of stocks held by those having no mechanical drying and advanced storage facilities would be deteriorated, they said.
Besides, according to growers, the incessant rains pounding the growing areas continuously for a several weeks now would affect the crop negatively bringing the output down.
September contract on the NCDEX moved up by Rs 38 to close at Rs 33,969 a quintal while October and November declined by Rs 61 and Rs 93 respectively to close at Rs 34,856 and Rs 35,350 a quintal.
Total turnover fell by over 40 per cent (4,095 tonnes) to close at 5,455 tonnes. Total open interest dropped by 288 tonnes to end at 11,824 tonnes.
September open interest decreased by 567 tonnes to 1,669 tonnes while that of October and November moved up by 242 tonnes and 30 tonnes respectively to 9,139 and 708 tonnes.
In the spot ungarbled price ruled steady at Rs 31,100 a quintal while MG 1 price was raised to Rs 32,600 a quintal as the processing cost has gone up to Rs15 a kg owing to the high moisture content in the prevailing rainy conditions, they said.
Indian parity in the international market was at $7,600-7,650 a tonne (c&f) and remained competitive and was attracting overseas orders, they claimed. Vietnam was Thursday offering 500GL at $7,350 fob HCMC NETT to shippers and 550GL at $7,750 a tonne. White pepper double washed was quoted at $10,500 a tonne.
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