Anomaly in pepper rates stumps traders

MG1 grade quotes vary substantially on NMCE, NCDEX.

The amazing difference in the quotations of black pepper on the NMCE and the Ncdex has triggered off a drop in spot prices.

The same quality MG1 grade of pepper, for example, is being traded at different prices on both the exchanges; and traders and exporters allege that there is a manipulation in prices in the futures contract.

The difference, which was noticed on Monday, continued even today. The March contract on the NMCE was quoted at Rs 11,140 a quintal, while the same on the NCDEX was trading at Rs 12,055 a quintal. Again, for the April contract, the NMCE has a tag of Rs 11,575 a quintal and on the Ncdex it was quoted at Rs 12,400 a quintal. Apparently, the difference in the other four contracts was Rs 750 -800 a quintal.

"... it is the same pepper that is being traded on both the exchanges. Why this difference in prices? Who is controlling the system!" a senior executive of a leading exporting house in Kochi reacted.

Leading traders said the futures contracts did not reflect the actual market situation but were influencing the spot prices. The spot market is on a high risk as the futures prices are manipulated to a great extent, they alleged.

Though there had been a correction today on both the exchanges, the difference in pricing still exists.

Meanwhile, Vietnam has geared up to rule the international market in the coming months as the flow of new crop will be in full swing within a couple of days. Vietnam's export price of $ 2,800 a tonne is at the same level with the Indian price.

According to traders in Vietnam, they might slash their tags in the coming weeks and might even drop $400-600 per tonne. Vietnam currently offers 500 gm / Liter grade at $2,340 and 550 gm Liter at $2,490 a tonne. Brazil offers BASTA at $2,500 but its stock position is rather low currently.