Pepper Jumps Around 3% In Intraday Moves

Indian pepper futures extended the gains on strong demand against the shortage of the commodity. Pepper arrivals in India started but arrivals are in smaller quantities. The pepper arrivals from Vietnam will begin in next weeks and stocks with other countries are at lower levels.

NCDEX pepper for the February delivery gained around 3% or Rs. 686 to the session high of Rs. 23540 and the contract ended the day higher by Rs. 506 or 2.21% at Rs. 23360 per 100 kg. The open interest in the contract added 1.56%, indicating fresh buying.

Sri Lanka's monsoon rains spread to more villages and towns on Sunday, leaving at least 14 people dead and more than one million with flooded homes, officials said. Sri Lanka cultivates paddy, pepper  etc… India imports pepper from Sri Lanka therefore this can impact pepper prices in long term.

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.

Pepper market was quiet last week due to Lunar New Year celebration, particularly in Vietnam and China. In Sarawak and Lampung, traders are also busy with the celebration. Although prices were reported unchanged at those origins, but trading was very limited. It is expected that market will be changing by third week of this month. In India, local price increased during the week from INR 21,300 per 100 kg to INR 21,700 at the week's close. On an average, the prices were relatively stable both for local as well as fob. Market was very firm in Brazil during last week with several contracts negotiated at average 4,900 - 4,950 pmt FOB. It is previewed a shipment congestion because of the commitments but also due to problems with Egyptian ports. Many exporters now are offering only for April shipments and freight rates might change by that time as already advised by the shipping companies.

(Source: http://www.indiainfoline.com/Markets/News/Pepper-Jumps-Around-3-percent-In-Intraday-Moves/3536163015)