Pepper domestic demand to support prices

Fundamental Analysis

Spot prices on the first trading day of the week traced futures due to lacklustre trade at the domestic market. Demand from the domestic and overseas market is expected to be placed in the coming weeks ahead of festive and winter season. This may provide support to the prices.

Pepper futures after touching a high to Rs.14,567/qtl witnessed profit booking and traded in bearish manner in the previous week. Prices in the coming days may trade in sideways to up manner due to expected demand from the overseas market.

Pepper prices in short term (till September 2009) are expected to trade sideways to up manner due to lower stocks of pepper with the major pepper growers such as Indonesia, Vietnam and India.

In the long term (October onwards) prices may depend on the demand from the overseas and domestic market, clear production estimates of Brazil and Indian production for the year 2010, pepper price parity of the major origins such as Brazil, Indonesia, India and Vietnam.

Technical Analysis

Pepper prices (NCDEX October 09 Contract) closed at Rs.13,995/qtl lower than Saturday’s close of Rs. 14,050/qtl.

Outlook:

Pepper prices in the intraday may trade in sideways manner due lacklustre trades at the domestic manner. In the short to medium term (mid of October) Pepper prices may be determined by the lower stocks of pepper with major pepper growing nations. In the long term (October onwards) prices may be determined by the demand from the overseas and domestic market, clear production estimates of Brazil and Indian production for the year 2010, pepper price parity of the major origins such as Brazil, Indonesia, India and Vietnam.

Courtesy: Angel Commodities

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