Pepper Gains on Domestic Demand.

Lower global availability of pepper in 2011 is providing strengthen to the bulls in the market. Also, Vietnam the largest producer and exporter is estimated to produce less pepper by 15%. This may further support the prices in the short term.

Also, delay in harvesting of pepper in Kerala which usually commences in last week of December will provide support to the prices in the short term if demand from the domestic stockists improves. Prices will also take cues from the price parity of major origins in the international market. At present all the major origins are quoting around same rates.

In medium to long term (January end onwards) prices will depend on the stocks of pepper with the major suppliers particularly Vietnam and Indonesia. Prices will also depend on pepper production in India in 2010-11 as due to current unseasonal rains the estimates may be revised.

Spread between January and February contract is Rs.262/qtl as compared to Rs.285/qtl the previous day

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

The 14-Day RSI is at 65.6 and is in neutral region.

Pepper prices in the intraday are expected to trade firm due to improved buying by the market participants. In the short term (till mid of January), Pepper prices will depend on global Black pepper availability and demand from the overseas and domestic market. In the medium to long term (January 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