Pepper prices to fall on import

Fundamental Analysis

Spot prices were quoted at lower rates amidst steady arrivals and offtakes. At the domestic markets farmers are bringing in the stocks in anticipation that the prices may fall further on account of imports from Vietnam. So, Pepper prices at the domestic market may witness further correction.

Prices at the futures witnessed selling due to reports of imports of Pepper in India from Vietnam. Prices may correct further due to slow trades at the domestic market. If, the parity between Vietnam 550 Gl pepper and our ASTA continues to be in the difference of 300-400 exporters and stockists may import cheaper pepper from Vietnam.

Pepper production in Vietnam for the year 2009 being higher is making their sellers to be on the profitable side. This may keep the prices sideways to down movement at the domestic market s.

Pepper price quotes in the international market of major exporting nations such as Indonesia and Vietnam will be crucial to determine the price trend at the domestic market in the short to medium term (April).

Technical Analysis

Pepper prices (NCDEX May 09 Contract) closed at Rs.12,525/qtl up by Rs.29/quintal as compared to Monday’s close of Rs. 12,496/qtl.

The 14-Day RSI is at 42.7 and is moving in sideways manner.

Outlook

Pepper prices in the intraday may witness sideways to down movement due to reports of imports of Pepper from Vietnam in the domestic market. In the medium term Pepper prices may be determined by demand from the overseas and domestic market and competitive rates of pepper of various origins.

In the long term various other factors may determine the price trend such as stocks with Vietnam, their pepper production for the year 2009 and demand from the overseas market.

Courtesy: Angel Commodities

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