Black Pepper weakens on sluggish demand

Lacklustre trades at the domestic market led spot prices to end lower on Saturday. However, futures rose by around 0.62% and ended at Rs.23099 Saturday on account of buying by the market participants. Demand from the overseas and domestic buyers are expected to improve in the coming days.
Export of black pepper from Indonesia in January – October 2010 increased by 4,814 mt (15%) from 32,926 mt in the same period of 2009 (source: ipcnet ).
.Production and Arrivals
Indian production is waning since the past few years due to old vines, static acreage, poor replanting and shift to other remunerative crops like rubber, cocoa and coffee. The average annual pepper production in India is 55,000 tonnes.
Pepper harvesting in India this season had a late start, reportedly commencing from 15Jan, 2011, albeit in small quantity, and is expected to gain pace from the first week of February. Harvesting, which usually starts in early December was delayed on account of the extended rains till mid-dec in the producing regions.
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. India has slipped to the fourth position in the world pepper export mart due to decline in the production since the past few years.
In the international pepper markets too output is expected to decline this year. Black pepper production in Vietnam, the largest pepper producer, is likely to be lower by around 9 percent at 1 lakh tones as compared to 1.10 lakh tonnes in the previous year.
Outlook
Pepper prices in the intraday are expected to trade sideways due to lacklustre demand.
In the short term (till January), Pepper prices will depend on demand from the overseas and domestic market and fresh arrivals in the physical mandi in Kochi.
In the medium to long term (February onwards), price trend will depend on pepper stocks with major producers and Black pepper production estimates of Vietnam for 2011.

(Source: http://www.commodityonline.com/futures-trading/technical/Black-Pepper-weakens-on-sluggish-demand-21433.html)