Pepper futures maintained its uptrend during Saturday’s trading session due to continued buying on the exchange supported by the factor of tight supply situation amid gaining demand.

Despite the expectations of increase in production, arrivals have remained on the lower side. This is leading to tight supply in the physical markets.

The active NCDEX April Pepper futures opened higher at 14140 levels and made an intraday high at 14502 levels, higher than the previous day’s high of 1435 levels.

It made an intraday low at 14080 levels and settled the day at 14502 levels, with a positive change of 3.00%.

Outlook

Pepper futures are expected to maintain its positive trend for the day supported by the fundamental factors of tight supply situation in the physical market. However, the upside might remain limited due to profit taking.

Brazil is facing adverse weather conditions and production is expected to be lower by 40% as compared to the last year crop of 35,000 tonnes

Tight supply situation is prevailing in the international market

In the international market India rate is $3,300-$3,350 per tonne (FOB) (+$200) while Vietnam is at $3,000-3,100 per tonne (FOB) and Indonesia at $3,225-3,325 (FOB) Brazil $2,900-2,950 (FOB Belem) for ASTA quality

Spot rate at the major market of Cochin has gone up by Rs.300 per quintal to Rs 13,800 per quintal for garbled pepper and up by Rs.200 to Rs 13,300 per quintal for ungarbled pepper

For NCDEX April contract volume has gone down by 50.91% while open interest has gone up by 6.64% on Saturday, which indicates a turn to lower side

Stock position at NCDEX accredited warehouses is stagnant at 2732 tonnes as on 19 March 2010

Courtesy: Kedia Commodities

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