G.K. Nair

Kochi, May 19
Pepper futures after witnessing high volatility moved up slowly in the afternoon session and closed much above the previous close. Buy calls and non-availability of farm grade pepper at a time when the MG1 parity is becoming nearly competitive in the US market have pushed up the market. The positive sentiments in the market such as that the restrictions on import of pepper from Vietnam by the US FDA, coupled with the present near-competitiveness of Indian parity could pave the way for some orders coming to India has aided the prices to move up. However, market sources alleged that Indonesia was cleverly undercutting and marketing its pepper in the US market after closely watching the Indian futures market trend.

Meanwhile, some consignments of about 150 tonnes of Sri Lankan pepper (said to be of 515-525 GL) have already landed in India at $3,100-$3,150 a tonne (landed cost about Rs 145 a kg). This has given rise to the fear that some part of it might enter the exchange while some others apprehended that part of it might be re-exported as MLSVB pepper.

“Given the strict checking by the US FDA, it is high time that the Union government introduced some strict measures to check the quality of the material arriving at the ports and ensure that it is free from salmonella and other objectionable factors. Otherwise, if it got into the hands of US authorities then it might tarnish the image of the Indian MG1,” some of the market sources alleged.

The market was slow in the forenoon. May delivery is maturing Thursday. Validity expired stock, which is claimed to be equivalent to farm grade pepper, will be tendered for delivery now. Since such material was available at the exchange below the spot prices buyers were said to be interested in it. May outstanding position was also at 1,009 tonnes. There were no sellers for farm grade pepper at Rs 160 and below a kg, market sources told the BusinessLine.