Pepper Trades Up on Export Demand.

Continuous rains might cause berries to fall from the creepers thereby reducing the production of pepper in 2010-11. This is supporting the prices to remain firm.

Also, lower global availability and therefore expectation of demand from the overseas buyers will support pepper prices to remain firm in the coming week. Prices will also take cues from the price parity of major origins in the international market.At present all the major origins at quoting at the same rates. Thus, overseas buyers might place fresh orders in India.

In medium to long term (December end onwards) prices will depend on the stocks of pepper with the major suppliers particularly Vietnam and Indonesia.

Prices will also take cues from the Indian pepper production projections. According to market sources Indian Pepper production in 2011 is expected to be higher. This will pressurize the prices in the long term.

Spread between December and January contract is Rs.208 as compared to Rs.220 the previous day.

Technical Analysis

Prices closed above its 10-Day and its 20-Day EMA indicating bullish trend.

The 14-Day RSI is at 59.4 and is in neutral region.

Outlook:

Pepper prices in the intraday are expected to trade sideways to up due better offtakes from local stockists and expectation of overseas orders. In the short term (till mid of December), Pepper prices will depend on global Black pepper availability and demand from the overseas and domestic market. In the medium to long term (December end onwards), price trend will depend on demand from the overseas and domestic market, pepper stocks with major producers and Black pepper production estimates of in India and Vietnam of 2011.

Source : commodityonline.com