Black Pepper gains on limited stocks

Spot pepper prices as well as futures ended higher 0.08% and 0.82% on Saturday owing to better offtakes by the local stockists. Reports of lower arrivals amidst recovery in the demand led prices to bounce in the previous week.
Despite, fresh arrivals in the domestic market reports of lower production in this season is providing support to the prices.
Overseas buyers are however following a wait and watch stance. According to International Pepper Community (IPC) export of black pepper from Vietnam during 2010 plunged 15.8% to 1,13,000 tonnes as compared to 1,34,264 tonnes 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 March.
.Production and Arrivals
Arrival of farm grade pepper has improved since past few days. Around 50-55 tonnes of new pepper arrived from various growing areas from 10-20 tonnes in the mid of January. 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. But, disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka might lead to downward revision in the production in this season.
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 with no clear fundamentals to drive the prices. Price parity in the international market of major origins may also determine the prices in the short term.
In the short term (till 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.
Courtesy: Angel Commodities

(Source: http://www.commodityonline.com/futures-trading/technical/Black-Pepper-gains-on-limited-stocks-21732.html)