Pepper futures extend the losses as we expected on weak export, domestic demand and fresh arrivals.
NCDEX Pepper for the February delivery ended the last session down 1.40% at Rs. 22308 after moving in the range of Rs. 22740- 22201 per 100 kg. The open interest dipped 3.80%.
Spot prices in tandem with the futures market trend dropped by Rs. 400 to close at Rs. 21,200 (un-garbled) and Rs. 22,000 (MG 1) a quintal in Kochi.
In today’s early trading session, Pepper for the February delivery traded in the range of Rs.22289-Rs22136 and the contract is currently trading lower at Rs. 22136, down Rs. 172 or 0.77% over the last close. The open interest added 1.12%, indicating short selling.
The contract is likely to find strong support at Rs. 22175 and below that could touch the low of Rs. 21950-21650 per 100 kg. The contract is likely to correct to Rs. 21900, 61.80% retracement level.
The market is watching on the development in India, since pepper harvest is on going. Stock in the domestic market is adequate following arrival of fresh crop. The market is slightly more active and sporadic. From HCMC it was reported that local prices of pepper decreased by 2%, but in Daklak, prices for raw material increased by VND 5,000 per kg to VND 85,000 this week. Fob price were stable as last week. In Lampung prices increased marginally, with meager activity. In Sarawak and Sri Lanka, prices were relatively stable.