Pepper Likely To Move Further Higher.

Pepper rates shot up from the lower levels as demand started picking up again after the moderate corrections in rates seen early last week.

Traders have been reportedly waited for some short term corrections in market rates for new demand as overall trend remains firm. Imposition of 10% additional margin on Buy side for Pepper contracts kept pressurizing market sentiments.

Favorable Monsoon report also affected short term sentiments slight though rates do seem to find support at these lower levels. A rise in demand from these levels could support the rates in the coming days

Good export and domestic demand, lower stocks and a fall in production are likely to support the market sentiments in the near term.

Traders expect that good demand and a firm trend in Vietnam could support the rates further. The exports are likely to pick up further and with stockists unwilling to sell at these levels, prices are likely to remain firm. Demand from North India remained moderately good.

Good demand from Gulf countries supporting the rates. Demand from China and West Asia also reported.

IPC has predicted 2011 crop to be lower by 2% at 309,952 MT. Carry forward 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.

Vietnam is having low stocks as per reports. The production there too is expected to fall this year as per some estimates. Brazil and Indonesian crop expected 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.

Latest reports from Spice Board of India indicates the likely Pepper exports for the period April-March 2010-11 have fallen by 5% to 18,850 MT in 2010-11 from 19,750 MT in 2009-10 same period.

Source : commodityonline.com