Pepper declines on subdued demand

There are lower stocks of Pepper with Vietnam and Indonesia till fresh arrivals expected next year. Any demand from the overseas buyers will support domestic prices in the short term.

Fundamental Analysis

There are lower stocks of Pepper with Vietnam and Indonesia till fresh arrivals expected next year. Any demand from the overseas buyers will support domestic prices in the short term. Further, demand from the domestic market ahead of festivals and winter season will help support prices.

In medium to long term (November onwards) prices will depend on the stocks of pepper with the major suppliers particularly Vietnam and Indonesia.

Prices will also take cues from the Indian pepper production projections. According to market sources Indian Pepper production in 2011 is expected to be higher. This will pressurize the prices in the long term.

Spread between November and December contract is Rs.305 as compared to Rs.281 the previous day.

Technical Analysis

Prices closed above its 10-Day but below its 20-Day EMA indicating sideways trend.

The 14-Day RSI is at 45 and is in the neutral region.

Outlook:

Pepper prices in the intraday are expected to trade sideways due to lacklustre trades at the domestic market. In the short term (till October), Pepper prices will depend on global Black pepper availability and demand from the overseas and domestic market. In the medium to long term (November onwards), price trend will depend on demand from the overseas and domestic market, pepper stocks with major producers and Black pepper production estimates of in India and Vietnam of 2011.-Angel Commodities

Tags: Vietnam Pepper, Vietnam Pepper prices