Pepper Futures Likely To Top Rs. 23,700.

Indian pepper futures extended the gains on strong demand against the shortage of the commodity. Pepper arrivals in India started but arrivals are in smaller quantities. The pepper arrivals from Vietnam will begin in next weeks and stocks with other countries are at lower levels.

Pepper for the February delivery ended the last session higher by 2.08% at Rs. 23329 after gaining around 3% over the previous close and the open interest added 1.03%. The contract is expected to touch the high of Rs. 23700 and support is seen at Rs. 23,200 per 100 kg.

Sri Lanka's monsoon rains spread to more villages and towns on Sunday, leaving at least 14 people dead and more than one million with flooded homes, officials said. Sri Lanka cultivates paddy, pepper etc… India imports pepper from Sri Lanka therefore this can impact pepper prices in long term.

Tight supply position against strong demand was witnessed in the global markets. Fresh arrivals from new crop were not much as harvesting delayed in kerala due to untimely rains. Domestic demand from the north Indian buyers during the winter season is strong.

Indonesia's pepper production will likely decrease by 33.4 percent to 37,000 tons this year from 56,000 tons last year due to bad weather conditions, according to the International Pepper Community (IPC).

Domestic production is projected to decline marginally in 2011 by 2,000 tonne to 48,000 tonne. According to the 38th IPC meeting held recently in Kochi, the new crop of 2011 is estimated to be lower by 2% at 309,952 tonne against 316,380 tonne in 2010 and 318,662 tonne in 2009. Carry-forward stocks in producing countries are projected to decline marginally to 94,582 tonne in 2011 from 95,442 tonne in 2010. Exportable surplus of producing nations is projected to be around 324,292 tonne in 2011, as against 333,092 in 2010.

Source : indiainfoline.com