Pepper, cumin hit lower circuit

Spices stole the limelight in the futures market today with unexpected price movements, which left market observers clueless over the future trends. Pepper and jeera (cumin seed) hit the lower circuit and made deep-valleyed graphs.

Though both the commodities were bearish over the last couple of days and are expected to fall further, the market observers do not seem to be ready for the declining prices.

"That the market would fall so steeply was not expected," said Naveen Mathur, head of commodities at Angel Broking. C Kannan, head of research of Kotak Commodity, said, "It is not usual. The kind of volatility the spices market showed today suggests that there is something more than technical."

On Tuesday, the near-month contract for jeera fell by Rs 723 a quintal to Rs 11,337 a quintal on the National Commodity and Derivatives Exchange (NCDEX), down 6 per cent. Similarly, pepper contract crashed to Rs 13,713, reflecting a fall of Rs 830 a quintal from the previous close of Rs 14,543, down 5.71 per cent.

The last three trading sessions witnessed a decline of Rs 1,258 a quintal in the jeera futures, whereas pepper, which was severely hit during the same period, declined by Rs 1,500 a quintal. Commodity analysts do not rule out the bearish trend continuing in the next couple of days. Market sources said the pepper prices dropped, owing to Vietnam releasing a huge quantity of the spice in the international market and the continuing surge in the rupee. Traders are, however, puzzled with the drop in jeera prices. Analysts added that the decline did not make sense because the fundamentals suggest a bullish phase, fuelled by unconfirmed reports of the crop loss in Syria and Turkey.