Black Pepper gains on better offtakes

Spot pepper prices ended lower 2.59% and 4% respectively on Friday owing to better offtakes by the local stockists. Futures hit new historical highs of Rs. 24445/qtl and ended in green yesterday.
Despite, fresh arrivals in the domestic market, reports of lower domestic production and delayed harvesting in Vietnam is providing support to the prices. Harvesting in Vietnam will commence by mid of February and is likely to gain momentum by March.
According to International Pepper Community (IPC) report, export of black pepper from Vietnam during 2010 plunged 15.8% to 1,13,000 tonnes as compared to 1,34,264 tonnes in the previous year(2009). The report also stated that there are lower stocks of pepper in Vietnam till fresh arrivals which would commence in the month of February. Carryover stocks in Vietnam are around 5,000- 6,000 tonnes as compared to 35,000 tonnes 2009-10. (source: spot market traders).
Production and Arrivals
Arrivals of pepper in the domestic mandi were around 20 tonnes amidst offtakes of 50 tonnes yesterday. But, pepper arriving in the market is of very low bulk quality.
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. However, there are expectations that this estimate would be lowered further on account of the disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka.
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.
Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.
Outlook
Pepper prices in the intraday are expected to trade sideways to up on account of lower availability in the domestic market. Thus, any demand from the overseas might support prices to strengthen in the short term.
In the short term (in February), Pepper prices will depend on demand from the overseas and domestic market and fresh arrivals in the physical mandi in Kochi. Prices will also take cues from the production of Pepper in Vietnam and carryover stocks in the country (Vietnam).
In the medium to long term (March onwards), price trend will depend on pepper stocks with Indonesia and demand from the overseas and domestic buyers.

(Source: http://www.commodityonline.com/futures-trading/technical/Black-Pepper-gains-on-better-offtakes-21887.html)