Pepper Extends Loss On Fear Of Arrivals And Profit Taking

Indian pepper futures extended the early losses on heavy long position liquidation amid fear of arrivals of crop from plain area in kerala by mid December.

Normally, in India, pepper harvest will begin in plain areas in kerala by mid December and in hilly area, it will begin by January.

Prices of pepper went up sharply from the low in October on strong buying support amid lower stocks.

NCDEX December pepper contract rallied to the level Rs. 23,338 as on 19th November 2010 from the low of Rs. 18506 per 100 kg as on 10th of October 2010.

Despite the estimated lower production, Prices corrected after hitting new high for the December contract on NCDEX on some profit taking as prices were at overbought levels.

NCDEX pepper for the December delivery touched the low of Rs. 21812, down Rs. 489 from the last close. The contract is currently trading lower at Rs. 21979, down Rs. 322 from the last close. The open interest dipped 5.13 percent to 10950 tonnes, indicating profit selling and volume traded as of now stood at 8,965 tonnes.

Fundamentals are likely to push the commodity further upside in long term. The 38th annual session of IPC being held recently in Kochi has projected the new crop of 2011 to be lower by 2% at 309,952 tonne against 316,380 tonne in 2010 and 318,662 tonne in 2009.

Domestic production is projected to decline marginally in 2011 by 2,000 tonne to 48,000 tonne.

The country is estimated to import 13,250 tonne of the commodity and export nearly 19,000 tonne. It still remains the largest consumer of pepper from producing countries with domestic consumption estimated at 45,000 tonne, which is marginally higher by 1,000 tonne from 2010.

Carry-forward stocks in producing countries are projected to decline marginally to 94,582 tonne in 2011 from 95,442 tonne in 2010.

Exportable surplus of producing nations is projected to be around 324,292 tonne in 2011, as against 333,092 in 2010. Exports during the coming year is projected at around 229,710 tonne.

Internal consumption of producing countries is projected at 125,202 tonne in 2011.

According to the latest updates from the spices board of India, spices exports from India during April - September 2010, Black Pepper exports from India during period dipped 4 percent to 9,100 and export earnings spurted by 9 percent to Rs. 15,906.00 lakh.

(Source: http://www.indiainfoline.com/Markets/News/Pepper-Extends-Loss-On-Fear-Of-Arrivals-And-Profit-Taking/3415720616)