Pepper Slides On Selling At Higher Levels On NCDEX .

Indian pepper futures pared the previous gains on short selling at higher levels, despite the firm fundamentals. The benchmark December pepper contract on NCDEX slipped to the low of Rs. 22361 after hitting the high of Rs. 22,491 per 100 kg. The contract is currently trading lower at Rs. 22,421, down Rs. 70 or 0.31 percent over the last close. The open interest in the contract added 0.53 percent to 9,414 tonnes as on last day, indicating short selling. Volume traded as of now stood at 2,516 tonnes.

Indian pepper futures ended the last session with smart gains lead by short covering amid strong demand against lower arrivals. Spot prices of pepper jumped by Rs. 300 to Rs. 21500 for MG-1 and Un-Garbled Pepper gained by Rs. 300 to Rs. 21200 per 100 kg in Kochi on Thursday. The benchmark December pepper contract on NCDEX ended the last session higher by 2.40 percent at Rs. 22491 after moving in the range of Rs. 22581- 21930 per 100 kg.

Fundamentals supported the commodity to gain and are likely to push the commodity further upside in long term. According to the 38th IPC meeting held recently in Kochi has projected the new crop of 2011 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. Exports during the coming year is projected at around 229,710 tonne. Internal consumption of producing countries is projected at 125,202 tonne in 2011.

Domestic production is projected to decline marginally in 2011 by 2,000 tonne to 48,000 tonne. The country is estimated to import 13,250 tonne of the commodity and export nearly 19,000 tonne. It still remains the largest consumer of pepper from producing countries with domestic consumption estimated at 45,000 tonne, which is marginally higher by 1,000 tonne from 2010.

As per the latest updates from the international pepper community, total export of pepper from all major exporting countries decreased during the period January to September 2010. Around 193,000 mt of pepper was shipped from Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka. During this period, exports from Brazil, India and Vietnam have dropped while from others increased. Compared to around 197,000 mt exports in the last year's corresponding period, there is a slight drop of 2%.

The six main producing countries together exported around 19,800 mt in September 2010 against 22,500 mt in September 2009, registering a decrease of 12%, due to significant fall of export from Vietnam and Brazil. Export from other countries has increased, but can-not offset the significant fall of export from Vietnam and Brazil . Compared to the export in the previous month (August 2010), export during September was also less.

Source : indiainfoline.com