Fundamental Analysis

Pepper prices at Kochi are tracking Pepper Futures. Trades at the domestic market continues to be lacklustre but is expected to improve in the coming weeks.

Pepper Futures November contract after making a low of 12600 levels bounced back due to improved buying by the market participants. Prices have strong support at 12561 levels breach of those levels may tend prices to fall further towards contract lows.

Fresh orders from the overseas as well as domestic market may limit the downside in the coming weeks.

There are limited stocks of Pepper with the stockists and farmers in India as well as Vietnam. This may support the prices to strengthen in short to medium term (first week of Oct - Nov). In the long term (Dec 08- Jan 09) however, prices may take cues from the stock position at the major producing nation such as Vietnam, Brazil, Indonesia coupled with demand from the overseas market.

Technical Analysis

Pepper prices (NCDEX Nov 08 Contract) closed at 13016 up by Rs.171/quintal as compared to Wednesday’s close of 12829.

The prices closed below its 10–Day and its 20-Day EMA.

Prices may witness sideways movement for the intraday.

Outlook:

Improved buying at lower levels by the market participants may keep Pepper prices sideways to up 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