Pepper, jeera, turmeric rally on supply squeeze.

MUMBAI: India pepper futures extended gains for a third day in a row on Thursday afternoon to hit a new contract high on reviving export and domestic demand amid a supply shortage, analysts said. The most-active July pepper contract was trading 1.47 per cent higher at 18,546 rupees per 100 kg, after hitting a contract high of 18,575 rupees earlier.

The contract had gained 3.8 per cent in the last two sessions. "Pepper is trading higher on supply problems and recovering demand," said Veeresh Hiremath, senior analyst with Karvy Comtrade. Buy pepper at around 18,650-18,700, targeting 18,900 with stop loss at 18,480, said Chowda Reddy, senior analyst with JRG Wealth Management.

India's pepper exports fell 12 per cent to 1,450 tonnes in April from the same month a year ago, and traders said there has been a pick-up in shipments. Output in 2010 is expected at around last year's levels, but prices are unlikely to fall sharply in coming months due to low carry-over stocks, a Reuters poll of eight traders, exporters and analysts showed.

JEERA: India jeera futures extended gains for a third day on Thursday afternoon on lack of supplies as stockists held back sales in anticipation of higher prices, analysts said. The most-active jeera contract was trading 1.84 per cent higher at 13,182 rupees per 100 kg.

"Traders want better price for their produce," said Karvy's Hiremath. Buy jeera at around 13,200, targeting 13,340, and maintaining a stop loss of 12,120 said JRG's Reddy. However, weak export demand capped the upside. Jeera exports dropped 9 per cent to 5,150 tonnes in April from a year ago.

TURMERIC: India turmeric futures reversed their morning losses on Thursday afternoon helped by limited stocks in the spot markets, but reviving monsoon, which is expected to help sowing and boost output could limit the upside, analysts said. The most-active July turmeric contract was trading 1.16 per cent higher at 14,600 rupees per 100 kg, after hitting a low of 14,330 rupees earlier.

Turmeric trade is left with lower carry-over stocks due to lower production last year. India's annual monsoon rains were 2 per cent above normal in the week to July 7, sources in the weather office said on Thursday. "Good rains is helping sowing and pressuring prices," said Karvy's Hiremath. Prices may trade in the range of 14,200-15,500 rupees, said Hiremath.

Source : Economic Times