Pepper Gains On Export Demand.

Spot prices of Black pepper and Futures ended 0.75% and 1.78% higher respectively owing to reduced arrivals at the domestic mandi amidst better offtakes. Anticipation of demand from the overseas buyers will support pepper prices.

Indian pepper prices in the international market are being offered at $5,500/tonne.

According to International Pepper Community (IPC) report, export of black pepper from Brazil in January and February 2011 surged by 10% and stood at 5,039 tonnes. During February 2011alone exports from the nation stood at 2,791 tonnes against 2,062 tonnes in same period previous year.

Import of Pepper in U.S. in 2010 gained by around 7% and stood at 70469 tonnes as compared to 65,855 tonnes in 2009. Indonesia held its position of being the largest exporter shipping around 25,174 tonnes to U.S. followed by Brazil (11,517), Vietnam (10,241) and India (4,064) tonnes.

Production and Arrivals

Arrivals of pepper in the domestic mandi on Tuesday stood at 20 MT 5 tonnes lower that of Monday. Offtakes stood at 40 MT lower than Monday.

Production of pepper in India in 2010-11 is projected to be 48 thousand tonnes (according to the Spices Board) as compared to 50 thousand tonnes last year. However, there are expectations that this estimate would be lowered further on account of the disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka.

In the international pepper markets too output is expected to decline this year. Black pepper production in Vietnam, the largest pepper producer, is likely to be lower by around 9 percent at 1 lakh tonnes as compared to 1.10 lakh tonnes in the previous year.

Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.

Outlook

Pepper prices in the intraday are expected to trade sideways to up owing to demand from the overseas buyers in the coming days. In the short term (March), Pepper prices will depend on demand from the overseas and domestic buyers. Prices will also take cues from pepper prices in the international market of various origins particularly India, Vietnam, Indonesia and Brazil.

In the medium to long term (April onwards), price trend will depend on pepper stocks with Indonesia and demand from the overseas and domestic buyers.

Source : commodityonline.com