May 17: The tremors of Pokharan found their echo in the Kochi pepper exchange during the week ended March 15. Pepper prices went on a tailspin as the sanction romours hit the market sentiments. While the traders were scurrying to cover their long-term export commitments, growers brought fresh produce to the market anticipating a free fall in prices.Spot pepper opened the week on a firm note and shot up by Rs 500 per quintal on Tuesday to 21,600 only to crash to Rs 19,900 per quintal on Wednesday. However, the market regained its confidence as the rumours about an imminent trade sanction by the US and the EEC were not found forthcoming. The market closed the week with a net loss of Rs 400 per quintal at Rs 20,500.
Dealers said the speculations about the fallout of the nuclear bravado was the major reason for the volatility in prices. "Rumours were rife about a possible trade sanction by the US and the EEC that would have proved catastrophic to the market," a prominent dealer said.
He added that thesanctions imposed by the US and its ilk were unlikely to demoralise the market. "We were caught off guard and the rumour mills were working overnight spinning tales about all kinds of sanctions, including a complete snapping of trade ties," a dealer said. "However, once the air was cleared, the market regained its stability."
Except for August futures, where traders left their flank uncovered, all other contracts suffered moderate losses and closed the week at lower levels.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
