Black Pepper tumbles on increased arrivals

Spot pepper prices ended lower 0.40% on Wednesday owing to better arrivals in the domestic mandis amidst lower offtakes by the local stockists. Futures however, ended higher 0.63% due to improved buying by the market participants.
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 in the month of March this season which usually arrives in the last week of February.
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 March.
Production and Arrivals
Arrivals of pepper in the domestic mandi were around 30 tonnes amidst offtakes of 20 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.
Outlook
Pepper prices in the intraday are expected to trade sideways to up on account of lower availability in the domestic market. Pepper prices in the international market of major origins are quoting around same levels. 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-tumbles-on-increased-arrivals-21821.html)