MUMBAI (Commodity Online): Weak trend persisted for Pepper last week as increased arrival pressure of the new crop pulled back prices. International markets too traded weak on good production reports in Vietnam and higher arrivals there.

Higher production estimates from Vietnam has been keeping sentiments slight weak. Latest reports keep production estimates at 1.35-1.40 lakh tonnes vs 1.0-1.10 lakh tonnes of the earlier estimates.

Expected higher arrivals of the new crop in International and the domestic markets and European and US exports being on the lower side some more fall in rates can be expected in the near term though medium to long term trend looks firm on expected rise in demand in coming months.

Special Margin (in cash) of 10% on the Long side has been imposed on all running contracts.

With Indian production expected lower due to adverse weather, lower acreage and a fall in productivity, any rise in exports could support the prices from a medium to long term point of view.

As per IPC latest estimates, global Pepper production expected to rise to 3,20,000 tonnes in 2012 vs 2,98,000 tonnes this year – a rise of 7.2%. Global exports expected to rise to 2.46 lakh tonnes vs 2.42 lakh tonnes in 2011.

Indonesian production expected to rise to 41000 tonnes up from 33000 tonnes. Malaysian production also expected higher at 26500 tonnes vs 25600 tonnes. Indian production expected to decline by 5000 tonnes at 43000 tonnes.

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 Pepper exports for the period April 2011-Jan 2012 have risen by 49% to 22300 MT in 2011-12 from 14950 MT in 2010-11 same period.

With inputs from Religare Commodities