Pepper likely to gain on firm export demand

IPC has predicted 2011 crop to be lower by 2% at 309 952 MT. Carryforward stocks are expected to decline marginally to 94 582 MT vs 95 442 MT.

Pepper rates too moved up on expectations of pick up in export demand in coming weeks. Traders are reportedly waiting for some more corrections before initiating fresh demand in the mandi. Once exports pick up they apprehend rates could shoot up. Overall trend had remained moderately up as rains in growing areas have reportedly affected the productivity adversely and this could support the prices from a medium term point of view. IPC has predicted 2011 crop to be lower by 2% at 309 952 MT. Carryforward 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. Reports of lower stocks could further support the price and traders are anticipating both exports and domestic demand to rise in coming weeks. Strengthening of Dollar vs Re could have positive impact on the export front. Vietnam is having low stocks as per reports that could result in export demand shifting to India. 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 Nov have fallen by 17% to 11 500 MT in 2010 from 13 850 MT in 2009 same period.

(Source: http://www.indiainfoline.com/Markets/News/Pepper-likely-to-gain-on-firm-export-demand/5053144635)