MUMBAI (Commodity Online): On the back of strong demand and lower supplies, India's pepper prices have rallied high on the spot as well as in futures market. Pepper in India's National Commodity and Derivative Exchange (NCDEX) for the March delivery traded up 12.02% to Rs 33,760 for the month of February till 23rd.
The decline in pepper production in India and Vietnam, world’s largest producer of pepper, amid high demand has been the reason for the price raise.
In India, Kerala and Karnataka are the largest producers and for 2012, the production is expected to decline 40% and 20% respectively and earlier, country's production was estimated at 48,000 tons for the year.
Indian pepper is priced at $7,300 a tons in Europe and $7,600 a tons in the US.While, the traders are not ready to set a base price as the commodity has remained higly volatile on the grounds of low availability which has created the fear in the minds of traders whether the amount invested is recoverable or not.
According to Karvy reports, the traders are advised to buy NCDEX pepper for March delivery at Rs 31840 and target price of Rs 32460 with a stop loss set at Rs 31550.
Meanwhile, the production in Vietnam is expected to fall 30%.
According to International Pepper Community (IPC), Global pepper production during 2012 is projected at 3,20,000 tons.
Vietnam, India, Brazil, Indonesia, Malaysia, Sri Lanka, China, Thailand, Australia (Queensland) are the major producers of pepper in the world.
Pepper for March delivery, in Singapore Mercantile Exchange (SMX), traded up 1.01% to 6520 Singapore dollar and in India's NCDEX, pepper traded up 0.41% to Rs 33,900 on 24 th February at 12:20 IST.
