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cheapbag214s
Posted: Sat 0:55, 24 Aug 2013
Post subject: Bears dominate pepper market-spun2
Bears dominate pepper market
The reasons attributed mainly were easier Vietnam market, selling pressure in Karnataka and good liquidation on the exchange platform. Besides, it was the closing week from the financial year and hence, transactions were also limited. At the same time, anxiety about a ban on futures trading, made many small ,
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, medium players resort to liquidation. The volatility in pepper continues to be very high at a time when the production is claimed to be 40-50 percent down.
The Forward Markets Commission has introduced a 15 percent additional margin on buyers and 5 percent on sellers,
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, to arrest the volatility.
Within the international market,
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, Indian pepper Malabar Gold is slightly above its competitor Indonesia's Lampong Asta. Vietnam is mainly offering FAQ 500 GL and 550 GL pepper and therefore,
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, their prices can't be compared with the MG 1 prices. Vietnam is said to become not offering Asta grade, its bold and heavy pepper which the world's top pepper producer is claimed to become changed into white pepper because of its premium.
On the other hand,
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, even when Malabar ended up being competitive there is said to be no material to offer as arrivals of recent crop continue to be thin, on one side, and high domestic price consequent towards the squeeze in supply, on the other.
In a bid to exploit this situation, importers are allegedly planning to generate 10,000 tonnes of cheap pepper to focus on the needs of Indian domestic consumers. However, weakening from the rupee makes imports costly. On the other hand, duty free imports are allowed for value addition and re-export, while all others attract over 70 per cent duty. A weak rupee and 70 per cent duty is probably not feasible for the importers.
Activities in the ready pepper market happen to be limited. Arrivals in the primary markets were very thin as Tamil Nadu based dealers were actively covering directly from the farmers and primary market dealers on cash and carry basis moving the material out to Tamil Nadu where no tax is levied on pepper, for onward sales to the upcountry markets.
The Kerala Government inside a bid to improve the revenue from taxes pushed up the rates by 1 per cent which, in turn, could trigger rampant smuggling out of the spices to Cumbum, Erode and Theni,
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, trade sources told Business Line.
Prices of all of the active contracts fell a week ago with Apr,
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, May and June down by Rs2,
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,315, Rs2,
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,615 and Rs2,690 respectively to Rs39,150, Rs39,
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,685 and Rs40,200 a quintal.
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