Fundamental Analysis
Benchmark pepper prices at Kochi were quoted at lower rates due to reports of fresh arrivals of Indonesian pepper being offered at lower rates.
Pepper futures after trading in rangebound manner witnessed selling due to above reported fundamentals. Prices may witness further selling if the support level of Rs.12, 530/qtl is broken.
Pepper parity in the international market being with minimal difference of $200/tonne between different origins may drive overseas buyers to the Indian nation. Once the fresh orders are placed in the nation prices may find support and strengthen in the medium term (July mid onwards).
Further, pepper production in Indonesia and Brazil in 2009, their carry forward stocks of pepper and demand from the overseas may determine the pepper prices in long term (July end onwards).
Technical Analysis
Pepper prices (NCDEX July 09 Contract) closed at Rs.12,432/qtl down by Rs.188/quintal as compared to Tuesday’s close of Rs. 12,806/qtl.
The 14-Day RSI is at 28.7 and is moving in sideways manner.
Outlook
Reports of fresh arrivals of Indonesian pepper and their quotes in the international pepper being quoted at lower rates may keep Pepper prices bearish in the intraday. In the short term (till mid of July) prices may be determined by competitive rates of pepper of various origins in the international market. In the medium to long term (July mid onwards till August) various other factors may determine the price trend such as stocks with Vietnam, Brazil and Indonesia’s pepper production for the year 2009 and demand from the overseas market.
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