Fall in arrival firms up pepper prices
Shrinkage in the arrival of black pepper in the spice’s major terminal market at Kochi has triggered a firm trend in the spot price of this pungent spice.
By Ratna Ganguli, TNN |
KOLKATA: Shrinkage in the arrival of black pepper in the spice’s major terminal market at Kochi has triggered a firm trend in the spot price of this pungent spice.
With arrival of pepper from the old stock plummeting to 12-14 tonne a day at Kochi between last Thursday and Saturday, spot price of semiprocessed pepper (garbled) soared to Rs 13,800 per quintal and that of raw pepper (ungarbled) to Rs 13,200 per quintal by the weekend. With this, it gained Rs 300 per quintal over the past the three days.
Anticipating a further crunch in the availability of pepper until the arrival of fresh crop, which is slated to hit the domestic market from March onward, speculators have become active again to raise their bids on the spice’s futures contracts.
Reduction in margin on contract values from 10% to 5% in recent times has also come to them as a shot in the arm. Driven by their calculation of profitbooking within a short time span, pepper’s January contract price gained by Rs 487 to touch Rs 14,120 per quintal and the February contract price by Rs 510 to Rs 14,460 per quintal by the weekend.
Market analysts said the speculative activity gets further momentum on reports of fresh enquiry by the US importers for Indian pepper. Plus, there is anticipation of increase in domestic demand. This is expected inspite of a projected slide in domestic production.
According to the latest estimate, pepper output in 2007-08 is forecast at 50,000 tonne, lower by 15,000 tonne from the last year’s level. The shortfall in pepper production is to be seen not only in India but also across the world.
Anticipating a further gain in pepper prices in the near future, farmers are also holding on to their stocks. As a result, supply of pepper from domestic sources, which have started diminishing from the last week of December 2007, has plummeted to 12 tonne per day on Saturday.
The supply situation is unlikely to improve before the arrival of fresh crop, which is expected to hit the domestic terminal markets after March.
According to market analysts, the pepper trading at major international trading hubs is expected to gain pace from next week. Fresh orders, expected particularly from the US after January, is likely to put further pressure on Indian pepper prices.
With arrival of pepper from the old stock plummeting to 12-14 tonne a day at Kochi between last Thursday and Saturday, spot price of semiprocessed pepper (garbled) soared to Rs 13,800 per quintal and that of raw pepper (ungarbled) to Rs 13,200 per quintal by the weekend. With this, it gained Rs 300 per quintal over the past the three days.
Anticipating a further crunch in the availability of pepper until the arrival of fresh crop, which is slated to hit the domestic market from March onward, speculators have become active again to raise their bids on the spice’s futures contracts.
Reduction in margin on contract values from 10% to 5% in recent times has also come to them as a shot in the arm. Driven by their calculation of profitbooking within a short time span, pepper’s January contract price gained by Rs 487 to touch Rs 14,120 per quintal and the February contract price by Rs 510 to Rs 14,460 per quintal by the weekend.
Market analysts said the speculative activity gets further momentum on reports of fresh enquiry by the US importers for Indian pepper. Plus, there is anticipation of increase in domestic demand. This is expected inspite of a projected slide in domestic production.
According to the latest estimate, pepper output in 2007-08 is forecast at 50,000 tonne, lower by 15,000 tonne from the last year’s level. The shortfall in pepper production is to be seen not only in India but also across the world.
ADVERTISEMENT
Anticipating a further gain in pepper prices in the near future, farmers are also holding on to their stocks. As a result, supply of pepper from domestic sources, which have started diminishing from the last week of December 2007, has plummeted to 12 tonne per day on Saturday.
The supply situation is unlikely to improve before the arrival of fresh crop, which is expected to hit the domestic terminal markets after March.
According to market analysts, the pepper trading at major international trading hubs is expected to gain pace from next week. Fresh orders, expected particularly from the US after January, is likely to put further pressure on Indian pepper prices.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
