Fundamental Analysis

Hoardings by the major pepper exporters such as Vietnam, Indonesia, India is providing support to the prices. Vietnam and India have lower pepper stocks which is restricting them to sell at lower levels.

In the short term (till September) prices will depend on the demand from the domestic market and pepper quotes of major origins such as Vietnam, Indonesia, Brazil and India in the international market.

Exports of pepper from Vietnam, one of the major producer and exporter, stood at 83,121 tonnes. Thus, they might hoard their pepper stocks till the fresh arrivals expected in the month of April next year. This will be supportive for the pricetrend in the medium term (October).

However, price quotes offered by Indonesia in the international market for its Pepper will determine the domestic price trend. This will cap the upside in the medium term (November onwards).

Spread between September and October contract is Rs.95 as compared to Rs. 103 the previous day.

Technical Analysis

Prices closed above its 10-Day and its 20-Day EMA indicating bullish trend.

The 14-Day RSI is at 56.8 and is in neutral region.

Outlook:

Pepper prices in the intraday are expected to trade firm due to improved buying at lower levels. In the short term (till September), Pepper prices will depend on global Black pepper availability and demand from the overseas and domestic market. In the medium to long term (October onwards), price trend will depend on demand from the overseas and domestic market, pepper production in Brazil and pepper price parity of the major origins such as Brazil, Indonesia, India and Vietnam.

Courtesy: Angel Commodities

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