Fundamental Analysis Despite strong fundamentals Pepper prices at the domestic market are not finding support and are tracing Pepper Futures. Pepper Futures extended the gains of the previous week and settled with positive note.
Overseas buyers are therefore reluctant to place orders as there is high volatility at the Futures. Other reason attributed for the slow orders is the global financial turmoil which has adversely impacted the exports.
Pepper production is expected either to be same as that of previous year or lesser marginally. Pepper production is estimated to be around 40-50 thousand for the year 2009. This may support the prices once fresh orders are placed from the overseas market.
There are limited stocks of Pepper with the stockists and farmers in India as well as with Vietnam. This may support the prices to strengthen in medium term (Nov). In the long term (Dec 08- Jan 09) however, prices may take cues from the stock position and production estimates at the major producing nation such as Vietnam, and India.
Technical Analysis Pepper prices (NCDEX Dec 08 Contract) closed at 11386 up by Rs.16/quintal as compared to Saturday’s close of 11370.
If, prices open above 11400 levels prices may touch Rs. 11580/quintal levels.
However, prices closed above its 10–Day but below its 20-Day EMA.
Prices may witness sideways to up movement for the intraday.
Outlook: Buying by the market participants may keep Pepper prices sideways to up movement for the intraday. In the medium term prices may find support and strengthen on expected demand from the domestic market whereas in the long term various other factors may determine the price trend such as stocks with Vietnam and India, their pepper production for the year 2009 and demand from the overseas market.
Courtesy: Angel Commodities
