Pepper prices seen firm on tight supply

Tight supply and speculative buying is likely to keep pepper prices firm in spot and futures markets for the next seven days, dealers said today.

Cardamom prices may stay in a narrow band and that of turmeric firm, they added.

Sellers in Vietnam, world's leading pepper producer, staying on the sidelines may help pepper spot and futures prices to stay firm here, dealers said.

Speculative buying by investors banking on tight supply in Vietnam is driving spot and futures prices, they added.

Vietnam Pepper Association, an apex body of pepper growers and sellers in that country has projected that fair average quality pepper will fetch around 60,000 VND a kg (Rs 150.83), a dealer here said.

Price in Vietnam is now at that level which helped to trigger a bull run in the commodity globally, he added.

Sections of dealers, however, also warned about the possibility of a correction because of slowdown in demand from overseas buyers following a rise in prices.

Exporters are staying away since the past few days following the slowdown in demand from overseas buyers, said Kishore Shamji, a leading exporter here.

Domestic buyers are also keeping away from the market following the rise in prices for the last couple of days. India is offering ASTA grade pepper at $4,150 a tonne (Rs 164,817), compared with $3,950 (156,874 rupees) a week ago, dealers said.

Analysts, however, feel the benchmark April contract on the NCDEX can move up to Rs 16,400 a quintal.