Pepper Drops On Profit Booking.

Black Pepper spot prices extended the gains of the previous day on account of reduced arrivals and better offtakes. Mixed sentiments was witnessed in Futures with prices initially trading at higher levels but profit booking led prices to settle 0.60% lower on Thursday. Reports that Vietnam, the major producer of the commodity is also not selling its produce aggressively are supporting the prices.

Indian pepper prices in the international market are being offered at $6,500-$6,800/tonne while Vietnam 500Gl has increased to $5,900/tonne as compared to $5,500/tonne in the week ended 15th April 2011. (souce: Peppertradeboard)

Exports from the major countries

According to Spices Board of India exports of pepper from India during April 2010- February 2011 stood at 16,600 tonnes as compared to 18,425 tonnes in 2009-10, decline of 10%.

According to International Pepper community (IPC) report, export of black pepper from Vietnam during January to March 2011 stood around 25,000 MT, a decline of 10% as compared to previous year. Pepper exports from Indonesia during January to March 2011 stood around 6,400 MT as compared to 5,700 MT in the same period previous year.

Import of Pepper in U.S. in 2010 gained by around 7% and stood at 70,469 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 stood at 30 MT – 10MT higher than the previous day while offtakes improved to 30 MT higher than 13 MT as compared to Wednesday.

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.

According to International Pepper community (IPC) global output is expected to decline by 6,500 tonnes as compared to 2010 to 3.10 Lakh tonnes. Vietnam production of the spice is expected to be same as that of previous year to 1.10 lakh tonnes.

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 likely to trade firm on account of lower supplies both in the domestic as well as in the international. Domestic prices will also take cues from pepper prices of Vietnam in the international market.

In the short term (March), Pepper prices will depend on demand from the overseas and domestic buyers. As the prices of Indian pepper in the international market are at the same levels as that of other major competitors such as Vietnam, Brazil and Indonesia demand from the overseas buyers are likely to be placed in India. This will provide support to the prices.

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