Pepper rates recoved smartly from the lower levels as reports of falling stocks and rising demand were reported in the International markets.
Again, stockists were reportedly not willing to sell at the lower levels as they felt the rates have corrected significantly over the past few months to bring it at par with the International market rates.
Both export and domestic demand (mainly from the Festive and marriage season in North India) rose last few weeks leading to the prices getting support at these levels.
Latest reports from Spice Board of India indicates the Pepper exports for the period April August have fallen by 5% to 7,600 MT in 2010 from 8,000 MT in 2009. Overseas demand is however expected to rise from the New Year and the Christmas season and that demand is expected to finish before the month of December.
With inventory levels of major importers like the EU reported to be low, one can witness increasing exports in the coming months.
Lower stocks with Vietnam and Indonesia have shifted the export demand to India and with lower crop expected in Brazil, the trend has remained bullish for the commodity – both in the domestic as well as the International markets.
The production in the Indian context too is expected to remain low. There have been reports of high production costs in Kerala due to its high labour costs that have affected the production of the crop there.
With rising demand and a fall in production and a fall in overall stock levels, one can witness a rising trend for the commodity in the coming months. A falling value of Dollar vs Re and any fall in International market rates are the factors that could affect the market sentiments for the commodity adversely.
With trading activities set to rise in the coming weeks, one can witness increasing volumes in the Futures market for Pepper.
(commodityonline.com)
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