Pepper falls on profit booking

Benchmark Kochi market of Black pepper remained closed on the occasion of Vishu, the Kerala New Year day on Friday. Futures extended the losses of the previous day and settled 0.12% lower w-w owing to profit booking by the market participants.
Indian pepper prices in the international market are being offered at $6,100-S6,250/tonne while Vietnam 55061 was being offered at around $6,200/tonne. (Source: Peppertradebroad)
According to Spices Board o1 India exports or pepper from India during April 2010- February 2011 stood at 16,600 tonnes as compared to 18,425 tonnes in 2009-10, decline of 10%.
According to International Pepper Community (IPC) report, export of black pepper from Brazil in January and February 2o1n1 surged by 100c and stood at 5,039 tonnes. During February 2o1m1 alone exports from the nation stood at 2,79 1 tonnes against 2,062 tonnes in same period previous year.
Import of Pepper in U.S. in 2010 gained by around 7% and stood at 70469 tonnes as compared to 65,855 tonnes in 2009. Indonesia held its position of being the largest exporter shipping around 25.174 tonnes to U.S. followed by Brazil (11,517), Vietnam (10,241) and India (4,064) tonnes.
Production and Arrivals
Arrivals of pepper in the domestic mandi since past few weeks are steady around 15-20 Mt whereas offtakes are in the range of 3s-40 Mt.
Production or pepper in India in 2o10-11 is projected to be 48 thousands tonnes (according to the Spices Board) as compared to 50 thousand tonnes last year. However, there are expectations that this estimate would be lowered further on account of the disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka.
In the international pepper markets too output is expected to decline this year. Black pepper production in Vietnam, the largest pepper producer, is likely to be lower by around 9 percent at I lakh tones as compared to 1.10 lakh tonnes in the previous year. Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.
Outlook
Pepper prices in the intraday are expected to trade sideways as the demand from the overseas particularly U.S. is likely to be lackluster due to Easter holidays ahead. Domestic prices will also take cues from the supplies in Vietnam and their pepper prices in the international market.
In the short term (March), Pepper prices will depend on demand from the overseas and domestic buyers. As the prices of Indian pepper in the international market are at the same levels as that or other major competitors such as Vietnam, Brazil and Indonesia demand from the overseas buyers are likely to be placed in India. This will provide support to the prices.
In the medium to long term (April onwards), price trend will depend on pepper stocks with Indonesia and demand from the overseas and domestic buyers.
Courtesy: Angel Commodities