The Hindu Business Line : Pepper seen weak in near term

Chennai, July 19 Pepper futures are witnessing long liquidation and a sluggish demand in the overseas and domestic markets could see the spice ruling weak in the near-term.

According to Kotak Commodities Services Ltd, the open interest position for August contracts indicates long liquidation, while volumes also indicated lower participation.

Share Khan, in its views, said pepper was witnessing consolidation in the Rs 14,600-14,900 a quintal range and Rs 14,635-14,600 was crucial on the downside and Rs 14,900-15,000 on the upside. A movement on either side could see the market accelerate.

Another commodity market player, Angel Commodities said pepper prices could be range-bound with fresh orders for the spice expected during September-October for December consumption. “Then prices may pick up momentum,” it said.

Arrivals pressure

The formation of alliance by Vietnam, Brazil and Indonesia could also see speculators enter the market, while lower stocks in other producing countries was forcing buyers into India. Currently, arrivals in Indonesia and Brazil were put pressure on the prices, it said. Share Khan put the support for pepper at Rs 14,200 and resistance at Rs 14,800, while indicating a downtrend for now.

Kotak Commodities viewed the current trend as long liquidation for August contracts and accumulation of short positions for September and October contracts.

Accumulation of short positions is an indication of the price heading lower.

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