MUMBAI (Commodity Online): Pepper traded sideways as absence of strong Fundamental factors prevented any strong movement.
There are expectations of some more corrections in short term before demand picks up in coming weeks. Buyers are reportedly waiting for new crop arrivals from Vietnam in mid-Feb before making fresh significant queries.
Indian arrivals have started. Indian rates are reportedly competitive in global markets but demand has not picked up as traders wait for further corrections in prices.
However with Indian production expected lower due to adverse weather, lower acreage and a fall in productivity, any rise in exports could support the prices at these lower levels.
There are expectations of some more corrections in the short term as higher production estimates are keeping pressure on the market sentiments. Medium term trend however looks positive on expected rise in export demand.
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.
The production in Vietnam, the largest producer, is expected at 1.10 lakh tonnes – a rise of 10,000 tonnes.
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-Nov 2011 have risen by 43% to 17000 MT in 2011 from 11850 MT in 2010 same period.
Courtesy:Religare Commodities
