Pepper May Drop on Weak Exports.

A weak trend was noted for Pepper as lower trading activities kept pressure on the prices. Weak exports and weakness in International markets from lack of exports there are keeping trend weak for the commodity. Traders are reportedly waiting for some more dips in short term but with demand expected to rise at lower levels that could support prices to some extent. Rains in growing areas have reportedly affected the productivity adversely and this could support the prices from a medium term point of view. IPC has predicted 2011 crop to be lower by 2% at 309,952 MT. Carryforward stocks are expected to decline marginally to 94,582 MT vs 95 442 MT. Global exports have declined by 11% to 237,650 MT.

Indian production expected to decline to 48,000 MT. Reports of lower stocks could further support the price and traders are anticipating both exports and domestic demand to rise in coming weeks. Strengthening of Dollar vs Re could have positive impact on the export front. Vietnam is having low stocks as per reports that could result in export demand shifting to India. Brazil and Indonesian crop ex pected to be lower. Low carryover stock in Brazil and Indonesia is likely to raise exports here in coming months. Reports of farmers shifting to other more profitable crops have affected the production aspects for the crop in India. Rains in growing areas in Kerala likely to affect crop arrivals. Latest reports from Spice Board of India indicates the Pepper exports for the period April Oct have fallen by 14% to 10,500 MT in 2010 from 12,250 MT in 2009.

Source : indiainfoline.com