Pepper Gains More Than Rs. 400 On Heavy Short Covering

The NCDEX pepper futures gained sharply on heavy short covering at lower levels. Pepper futures in India dipped to nearly one month low on selling triggered by weak export and domestic demand and reports of fresh arrivals.

Pepper for February delivery touched the low of Rs. 22175 on last day and gained massively in today's trading sessions.

The February delivery pepper gained by Rs. 427 to the session high of Rs. 22740 per 100 kg in today's afternoon session. The contract ended the session higher by Rs. 404 or 1.81% at Rs. 22717 per 100 kg. The open interest dipped 1.06% to 9006 tonnes. The volume traded dipped to 5,320 tonnes from 4,660 tonnes.

The spot prices of pepper jumped by Rs200 to Rs22200 for the MG-1 and the Un-Garbled pepper jumped by Rs200 to Rs. 21400 per 100 kg in the kochi mandi.

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.

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.

A total quantity of 14,000 tonnes of pepper valued Rs. 266.25 crores has been exported as against 15,425 tonnes valued Rs. 243.27 crores of last year. The unit value of pepper has increased from Rs. 157.71per kg in 2009-10 to Rs. 190.18 per kg during 2010-11.

(Source: http://www.indiainfoline.com/Markets/News/Pepper-Gains-More-Than-Rs-400-On-Heavy-Short-Covering/3511673242)