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07.33
Pepper futures market India have been manipulated and a cartel has been indulging in insider trading causing huge suffering to farmers, according to Associated Chamber of Commerce and Industry (ASSOCHAM). The maximum price went up from Rs. 25.053 per quintal in Rs. 2010 – 11 to Rs. 45,005 per quintal in 2011 – 12. The price fluctuation in 2011 – 12 is also extremely high with a price range (different between maximum prices) of Rs. 19,563 for the year, as compared to the range being less that Rs. 6,000 till 2009 – 10.
Black pepper futures market exhibits average price changes (returns) and volatility in 2011 – 12, which is within the range of figures recorded in market history while, average price and returns have been stable, volatility has slightly gone up in 2011 – 12 compared to 2012 – 2011.
The chamber Secretary General D.S. Rawat while releasing the study said, “the commodity exchanges must develop a regular system of monitoring price and trading behavior of commodities in order to avoid such episodes in future as even the cases of suicides have come to notice”.
The chamber study observed that the average pepper price of black pepper Rs. 7,181 per quintal in 2004-05, which almost doubled in 5 years reaching Rs. 13,748 in 2009 – 10. However, in 2010 – 11, the average price stood at Rs. 20231 per quintal and rose further to Rs. 32,803 per quintal in 2011 – 12, with maximum being Rs. 39,200 per quintal.
In 2011 – 12, there is no significant variation in skewness and kurtosis figures compared to previous two years. The distribution of price changes / returns continues to be leptokurtic suggesting informational inefficiency which may possibly be exploited by insider traders.
The trading volume has remained static in 2011 – 12, while open interest has improved marginally compared to 2012 – 11 figures.
In 2011 – 12, seven structural breaks are observed in pepper futures price changes / returns viz., 23-06-2011, 28-06-2012, 21-12-2011, 27-12-2012, 27-02-2012, 21-03-2011 and 26-03-212. The number of structural breaks is unusually large, in this case.
Despite observed pepper price distortions in 2011 – 12, black pepper futures and spot prices apparently exhibit a long-run equilibrium relationship as confirmed by the Johansen multivariate co-integration tests.
Further, bivariate volatility spillovers are empirically confirmed between futures and sport market. This implies that high volatility in futures market drives high volatility in spot market vice-versa.
Reversed destabilization effect is observed. Spot market volatility tends to affect futures market trading activity. The results may be explained by the fact that spot market is not well-organised and lacks transparency.
Pepper futures market recorded highest annualized returns of 52.37 percent in 2006 – 07 and the lowest annualized returns of -16.95 percent in 2008 – 09. It achieved highest and lowest annualized volatility of 36 percent and 18 percent in 2006 – 07 and 2005 – 06, respectively. The futures returns generally exhibit skewness with not consistency in signs. They are also, generally, leptokurtic. The return distributions exhibit normality in 2007 – 08 and 2009 – 10.
ASSOCHAM has urged the market regulator, Forward Markets Commission to investigate the anomalous price changes and trade behavior found in pepper futures between June 2011 and March 2012.
Pepper Futures market in India
Written By mine on Kamis, 22 November 2012 | 07.33
What happen with pepper futures market in India? And how about black pepper futures market? Find answers here!
Pepper futures market India have been manipulated and a cartel has been indulging in insider trading causing huge suffering to farmers, according to Associated Chamber of Commerce and Industry (ASSOCHAM). The maximum price went up from Rs. 25.053 per quintal in Rs. 2010 – 11 to Rs. 45,005 per quintal in 2011 – 12. The price fluctuation in 2011 – 12 is also extremely high with a price range (different between maximum prices) of Rs. 19,563 for the year, as compared to the range being less that Rs. 6,000 till 2009 – 10.
Black pepper futures market exhibits average price changes (returns) and volatility in 2011 – 12, which is within the range of figures recorded in market history while, average price and returns have been stable, volatility has slightly gone up in 2011 – 12 compared to 2012 – 2011.
The chamber Secretary General D.S. Rawat while releasing the study said, “the commodity exchanges must develop a regular system of monitoring price and trading behavior of commodities in order to avoid such episodes in future as even the cases of suicides have come to notice”.
The chamber study observed that the average pepper price of black pepper Rs. 7,181 per quintal in 2004-05, which almost doubled in 5 years reaching Rs. 13,748 in 2009 – 10. However, in 2010 – 11, the average price stood at Rs. 20231 per quintal and rose further to Rs. 32,803 per quintal in 2011 – 12, with maximum being Rs. 39,200 per quintal.
In 2011 – 12, there is no significant variation in skewness and kurtosis figures compared to previous two years. The distribution of price changes / returns continues to be leptokurtic suggesting informational inefficiency which may possibly be exploited by insider traders.
The trading volume has remained static in 2011 – 12, while open interest has improved marginally compared to 2012 – 11 figures.
In 2011 – 12, seven structural breaks are observed in pepper futures price changes / returns viz., 23-06-2011, 28-06-2012, 21-12-2011, 27-12-2012, 27-02-2012, 21-03-2011 and 26-03-212. The number of structural breaks is unusually large, in this case.
Despite observed pepper price distortions in 2011 – 12, black pepper futures and spot prices apparently exhibit a long-run equilibrium relationship as confirmed by the Johansen multivariate co-integration tests.
Further, bivariate volatility spillovers are empirically confirmed between futures and sport market. This implies that high volatility in futures market drives high volatility in spot market vice-versa.
Reversed destabilization effect is observed. Spot market volatility tends to affect futures market trading activity. The results may be explained by the fact that spot market is not well-organised and lacks transparency.
Pepper futures market recorded highest annualized returns of 52.37 percent in 2006 – 07 and the lowest annualized returns of -16.95 percent in 2008 – 09. It achieved highest and lowest annualized volatility of 36 percent and 18 percent in 2006 – 07 and 2005 – 06, respectively. The futures returns generally exhibit skewness with not consistency in signs. They are also, generally, leptokurtic. The return distributions exhibit normality in 2007 – 08 and 2009 – 10.
ASSOCHAM has urged the market regulator, Forward Markets Commission to investigate the anomalous price changes and trade behavior found in pepper futures between June 2011 and March 2012.
08.27
Futures Pepper Prices Decline, NCDEX Pepper Trading Lost Early Session
Written By mine on Jumat, 18 November 2011 | 08.27
Pepper futures prices on Tuesday declined marginally as speculative long position holders resorted to liquidation to get out of the market.
Investors who have been selling validity expired and farm grade pepper stocks were buying back their sales. Exporters were also covering. But the activities were limited. There was no switching over as the ?badla? has narrowed down, market sources told Business Line.
There was no activity in the ready pepper market in the absence of sellers.
Nov contract on the NCDEX declined by Rs 40 to close at Rs 34,330 a quintal. Dec and Jan dropped by Rs 85 and Rs 45, respectively, to close at Rs 34,705 and Rs 34,980 a quintal.
Total turnover fell by 1,122 tonnes to 4,289 tonnes. Total open interest dropped by 431 tonnes to 11,593 tonnes.
Nov open interest decreased by 509 tonnes to 1,765 tonnes, while that of Dec moved up by 103 tonnes to 9,108 tonnes and Jan declined by 17 tonnes to 524 tonnes.
Spot prices remained unchanged today also at Rs 32,800 (ungarbled) and Rs 34,300 (MG 1 ) a quintal on limited activities.
Indian parity in the international market was at $7,300-7,350 a tonne (cf) Europe and $7,600-7,650 a tonne (cf) for the US, and remained very much in line with other origins especially Vietnam which is closely following the Indian futures market trend. All are on a wait-and-watch mode in the overseas markets. At present, availability is believed to be in India and Brazil, while the position in Pepper futures rose Wednesday due to thin supply in the physical markets and limited stocks from the fresh crop.
At NCDEX Pepper December contract is trading at Rs.34590 per quintal, up by 0.53 per cent 16:05 IST against the previous close.
In the early sessions the contract traded at a range of Rs.34195-34685 per quintal. Open interest of the contract is 1578 lots and volume traded is 390 lots for the time being.
Reports that Pepper crop in 2011-12 might fall below last year level of 48,000 tonnes is supporting pepper prices. It expected to be in the range of 42-44 thousand tonnes.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper will also support prices.
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
Pepper futures rose Wednesday due to thin supply in the physical markets and limited stocks from the fresh crop.
At NCDEX Pepper December contract is trading at Rs.34590 per quintal, up by 0.53 per cent 16:05 IST against the previous close.
In the early sessions the contract traded at a range of Rs.34195-34685 per quintal. Open interest of the contract is 1578 lots and volume traded is 390 lots for the time being.
Reports that Pepper crop in 2011-12 might fall below last year level of 48,000 tonnes is supporting pepper prices. It expected to be in the range of 42-44 thousand tonnes.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper will also support prices.
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
Investors who have been selling validity expired and farm grade pepper stocks were buying back their sales. Exporters were also covering. But the activities were limited. There was no switching over as the ?badla? has narrowed down, market sources told Business Line.
There was no activity in the ready pepper market in the absence of sellers.
Nov contract on the NCDEX declined by Rs 40 to close at Rs 34,330 a quintal. Dec and Jan dropped by Rs 85 and Rs 45, respectively, to close at Rs 34,705 and Rs 34,980 a quintal.
Total turnover fell by 1,122 tonnes to 4,289 tonnes. Total open interest dropped by 431 tonnes to 11,593 tonnes.
Nov open interest decreased by 509 tonnes to 1,765 tonnes, while that of Dec moved up by 103 tonnes to 9,108 tonnes and Jan declined by 17 tonnes to 524 tonnes.
Spot prices remained unchanged today also at Rs 32,800 (ungarbled) and Rs 34,300 (MG 1 ) a quintal on limited activities.
Indian parity in the international market was at $7,300-7,350 a tonne (cf) Europe and $7,600-7,650 a tonne (cf) for the US, and remained very much in line with other origins especially Vietnam which is closely following the Indian futures market trend. All are on a wait-and-watch mode in the overseas markets. At present, availability is believed to be in India and Brazil, while the position in Pepper futures rose Wednesday due to thin supply in the physical markets and limited stocks from the fresh crop.
At NCDEX Pepper December contract is trading at Rs.34590 per quintal, up by 0.53 per cent 16:05 IST against the previous close.
In the early sessions the contract traded at a range of Rs.34195-34685 per quintal. Open interest of the contract is 1578 lots and volume traded is 390 lots for the time being.
Reports that Pepper crop in 2011-12 might fall below last year level of 48,000 tonnes is supporting pepper prices. It expected to be in the range of 42-44 thousand tonnes.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper will also support prices.
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
Pepper futures rose Wednesday due to thin supply in the physical markets and limited stocks from the fresh crop.
At NCDEX Pepper December contract is trading at Rs.34590 per quintal, up by 0.53 per cent 16:05 IST against the previous close.
In the early sessions the contract traded at a range of Rs.34195-34685 per quintal. Open interest of the contract is 1578 lots and volume traded is 390 lots for the time being.
Reports that Pepper crop in 2011-12 might fall below last year level of 48,000 tonnes is supporting pepper prices. It expected to be in the range of 42-44 thousand tonnes.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper will also support prices.
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
09.34
Commodity Pepper Future Prices Fell as Speculators Triggered by Export Demand
Written By mine on Sabtu, 19 Februari 2011 | 09.34
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.
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.
