NMCE Agro Outlook July 18, 2008

Pepper futures in NMCE continued its bull run on firm spot market. Vietnam pepper association Tuesday confirmed that pepper out put in 2008 declined to 87,000 tonnes, compared with 90,300 tonnes last year. Kerala, India's largest producer has received 39 percent lower rainfall during June 1-July 9, compared with its long-term average, according to the weather department. Traders are approaching a wait and watch strategy ahead of arrivals from Indonesia and Brazil. Farmers and stockists are holding their stocks on expectation of increase in price. According to the Spices Board, total pepper output in India was 50,000 tonnes this year, almost steady compared to last year. In Vietnam, the largest producer and exporter, harvesting ended in June while in India, harvesting starts in December and continues to February.

August contract in NMCE traded in the range of Rs. 144.34– Rs. 146.90 and closed at 146.27 (144.32). Combined volume stood at 1858. Open interest decreased by 67 to 823. Pepper inventories in the NMCE accredited warehouses decreased by 1MT to 1496 metric tonnes. Pepper spot price quoted at 14400 rupees up by 200 rupees per quintal, in Kochi.

INTRADAY OUTLOOK

NMCE Pepper (August) bullish above 146.09 next levels are 147.00 and 148.30. Bearish below 145.37 Next levels are 144.19 and 142.95.

TECHNICALS –NMCE-(INTRADAY-CALLS)

Pepper (August) Bullish above 146.09 bearish below 145.3