Commodity Pepper Future Prices Fell as Speculators Triggered by Export Demand

Pepper commodity prices fell by Rs 106 to 23,772 per quintal in futures trade today as speculators reduced their positions, triggered by weakening export demand. At the National Commodity and Derivatives Exchange, pepper for delivery in March contract fell by Rs 106, or 0.44 per cent, to Rs 23,772 per quintal, with an open interest of 9,162 lots.

Similarly, the spice for delivery in February moved down by Rs 99, or 0.41 per cent to Rs 24,111 per quintal, clocked an open interest of 4,079 lots.

Analysts said weakening export demand against adequate stocks mainly led to the decline in pepper futures prices.

Buoyed by the depleting stocks and lower availability of pepper from producing countries, its futures prices shot up by 1.49 per cent today.

However, weakness in export demand, capped the gains.

At the National Commodity and Derivatives Exchange, pepper for delivery in June shot up by Rs 359, or 1.49 per cent, to Rs 4,450 per quintal, with an open interest of 97 lots.

The spice for delivery in March also gained Rs 284, or 1.21 per cent, to Rs 23,783 per quintal, with an open interest of 9,361 lots.

Market analysts attributed the significant rise in pepper futures prices to falling stocks and thin supplies from major producing regions.

Pepper looks like being costlier in global markets this year, with Vietnam asking almost double last year?s price for its fresh stock of black pepper.

It is quoting $5,000-5,050 a tonne for the ASTA grade, compared to $2,750-2,800 at the beginning of the last season. Vietnam is the world?s largest producer and exporter of the spice and is expected to have a crop size of 100,000 tonnes this season.

Importers in the US and Europe aren?t convinced and are holding back their orders, a prominent exporter told Business Standard. He said the US could wait for another four to six weeks, as it had imported more pepper in 2010. The market expects US imports would be active only by the end of next month. Some, in fact, say the US demand would pick up only by the middle of the year.

The US imported 52,014 tones of black pepper in 2010, as against 49,148 tones in 2009.

Though harvesting in Kerala is active, arrival at wholesale markets is low, compared to last season. A change is expected by next month, once harvesting in Karnataka picks up.

India currently offers $5,350 a tonne for ASTA grade, but isn?t having much of takers abroad. The tags of all leading producing countries are above the $5,000 mark.So, the average yearly price seems likely to be on a higher mode this year.