J La Rive "Pepper prices due for correction"

Black pepper prices which started moving from 30th July took a breather today in India which was immediately followed in other producing origins as the cheer leader India after the sprint started panting a little.

In less than 30 minutes the Indian Casino which trades pepper hit the bottom circuit level the enthusiasm of the bulls dropped suddenly.The market took pause in 2 stages of the rally at 138 and 145 but the expert opinions of new generation research analysts( some of them even has not seen pepper ) at major commodity broking houses continued to give buy calls giving higher targets for sept contracts. Since the demand was very weak from inside India and from overseas the spot prices did not move in the same fashion in which the future deliveries moved up.The investors were getting Indian rupees 8 to 10 per Kg as spread between spot and sept future delivery prices. Close to 1000 mt pepper suddenly got hedged in the exchange from stockiest and farmers who have been waiting for almost an year to sell and been expecting this levels.

When India dropped usd 100 pmt in the licensed Casino without any drop in the spot market the drop in Vietnam was used 250 pmt on shipment prices and used 200 from Indonesia and usd 100 from brazil.The markets in all origins were moving up sharply without any Business worth mention its for sure that the markets are going to crack and break.There were more talk than actual business although an American broking house and a European broking house were adding fuel to the fire with presumed trades being reported.

This market is due for a correction of 10-%in the coming days itself as in India they are nearing the maturity and closing out of August contract as speculators dont take physical deliveries besides lack of export demand and indian domestic demand.

But one shouldnt take it lightly after the correction as we have seen prices zooming without any buying support other than the faq grades from Vietnam from Middle east and Africa. So if the actual demand which is expected to come after summer holidays of both Europe and America, where are these prices going to hit usd 1.75/lb or usd 2.00/lb??

Lets wait and watch patiently

Best Rgds

La Rive ..

PEPPER - SWEET MEMORIES

Weekly Highlights
2009-08-10

Remember last monday ?

"2009-08-04
Market in Brazil today was extremely firm with enquiries poppin in and some trades done reported at 2,550 fob for ASTA."

Well, today Brazil sold reportedly BASTA to US at $ 2,960 pmt And US roported also purchase from Indonesia at $ 2,900 pmt FOB
Other price indications were reported as Vietnam 500 gl up tp $ 2,750 and 550gl up to $ 2,880. Brazil was asking $ 2,750 for B2 and $ 2,850 for B1 while India was said to reach the level of $ 3,300 for MG1. Non-stop breathless climb. Acording some american observers it seems that buyers are supporting this move upwards by purchasing even as quietly as possible some quantities needed for coverage. If this is true it might be considered that the pace is consolidated. For that purpose we publish a note today, about an European report.

Coming back to last monday: $ 400 pmt in one week ! - not a bad deal.

Sweet memories...

J La Rive discuss teh article "Pepper ends the day extremely firm"

Please find below some comments on selected points of the article Pepper ends the day extremely firm published below

ARTICLE: Pepper ends the day extremely firm here in India with prices soaring to a 12 month high.
COMMENT: Yes True

A - Markets moving on bullish fundamentals and higher outside support, spill over strength from other commodities apparently lending very good support.
C - Market moving only on speculative buying in the Ncdex and there is virtually no internal or external buying support. Spill over from other commodities yes because the platform is designed as a casino.

A - The charge in pepper is led by the lack of sellers on the spot market which continues to spiral on the back of very firm future deliveries and very good buying interest.
C - There are sellers in spot market and takers are very few other than investors who are buying spot and selling future deliveries at a killing differnce from spot to future sept deliveries.

A - Prices on the future deliveries hit the 3 % circuit and closed at the day’s high.
Tight supply conditions continue for spot pepper which is being sought after by domestic traders in particular.
C - There is Plenty supply now as the prices have moved up and it will continue for some more time as many traders and stockists who were caught with inventories between inr 135-140 last year are coming out to get rid of the stocks and convert into Cash

A - Lower volumes in trade hitting the spot scene with most traders not excited with the rise in prices, since much of pepper has already been out of their hands as of now.
Higher markets from other origins act as a spark to fuel the upward surge
C - For how long ? as speculators wont pick up physical deliveries and next week itself we will see a big sell off and prices dropping like 9 pins

A - Indian MG I ASTA grade parity at $ 3100 / 3125 PMT FOB Cochin
C - But who cares indian parity ??

Rgds

La Rive

Pepper ends the day extremely firm

Pepper ends the day extremely firm here in India with prices soaring to a 12 month high.

Markets moving on bullish fundamentals and higher outside support, spill over strength from other commodities apparently lending very good support.

The charge in pepper is led by the lack of sellers on the spot market which continues to spiral on the back of very firm future deliveries and very good buying interest.

Prices on the future deliveries hit the 3 % circuit and closed at the day’s high.
Tight supply conditions continue for spot pepper which is being sought after by domestic traders in particular.
Lower volumes in trade hitting the spot scene with most traders not excited with the rise in prices, since much of pepper has already been out of their hands as of now.

Higher markets from other origins act as a spark to fuel the upward surge

Indian MG I ASTA grade parity at $ 3100 / 3125 PMT FOB Cochin

BLACK GOLD SHINNIG AGAIN

Black Gold which was neglected and depressed by recession news and macro economic news in the last 5 working days have become the center of attraction once again.

With Vietnam selling off almost everything in the first seven months of the year fearing National Commodity Exchange ( Ncdex) who have taken their trousers off last year did not wait for higher prices sold almost everything they have and now bewildered.
Indonesia who were almost spoiling the party for second half of the year suddenly came to their senses and increased the asking prices very close to Indiam levels.

Malayasia has become an importer of both black and white pepper from Vietnam quitely and marketing as Sarawak Black and Sarawak white to their predominant markets like Japan ,Korea and Taiwan was totally keeping away from major consuming markets like USA and European Union..
India the traditional cheer leader for the first time has become a follower of Vietnam this year and now took the lead in exciting global pepper cultivators, traders and speculators keeping aside pepper exporters and traditional pepper traders always complaining about the poor and backbone less regulator of futures trading FMC..

They just don't know whats the literal meaning of regulation according to Keralla farmers and traders of black pepper.and have made the  national exchange a gamblers den and money laundering platform.
According to Ms Yuliani of Putrabali Indonesia every origin has become manipulators and it has become impossible to do any business these days although markets have moved up quite a bit..

When contacted All India Spices Exporters forum vice chairman and the largest exporter of Indian pepper was kind enough to give us his estimate of stocks lying in different origins before the next new crops of India and Vietnam:
Indonesia exportable 5000 mt; Vietnam 40000 mt against just 15000 mt as claimed by some section of the media; 25000 mt from Brazil and 5000 mt from India which includes 2000 mt lying in the national exchanges and balance with farmers/traders.
The stocks of exporters cannot be taken as it is already sold in the national exchanges because of the attractive prices at which you can sell only in India and nowhere in the world.

Current prices of Asta pepper in different origins

Brazil 2700 fob belem
Indonesia usd 2850 fob Panjang
Vietnam usd 3050- 3100 fob hcmc
India Mg-1 asta usd 3050- 3100 fob Cochin
Sarawak Asta usd 3200 fob kuching

Think twice before you leap as some major players feel that it is overdone and not much to the north as industries are taken care by global traders and its their patience which has to be tested and not the industries

Rgds
La Rive

INDIA TODAY AUG 3rd

Pepper continues to move very very firm here in India with prices zooming ahead, International pairity pegged further higher as $ is weak again. Prices finishing off the day almost on the its highs at around + 2.5 to 2.75 % than the previous day. The movements of other spice agri futures were seen with similar patterns hinting at more and more outside participation. These influences were extremely supportive and perhaps sparking off some huge short covering too.
Analysts and traders continued to remain bullish on pepper as inventories remain tight with a lot of buying to be completed, fundamentals for spot pepper remained the same with supply extremely tight although the speed of the surge much faster on the future deliveries than on  spot.
Indian MG I ASTA grade parity at $ 2900 PMT FOB Cochin.

We are on Twitter now

Follow us on Twitter Peppertrade.
Short and Fast market News & Tips

Access and follow

Peppertrade Editor