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Market report
Pepper markets have calmed down

Pepper markets have calmed down from previous weeks' hectic pace. The buyers have slowed down on their push to buy, and the origins have eased in kind ,due to lack of business and currency fluctuations. Indonesia, remains virtually absent from the party and continue to quote similar prices for the last 2 weeks, ie; Lasta range bound between $8500 and $8600 fob panjang. India has eased over the last few days as the October futures position is closing, and currency fluctuations. The exchanges have shown tremendous volatility during the intra-day trading for the last week. One point is quiet clear - the physical stocks are dwindling and pricing remains firm for physicals regardless of the exchanges shenanigans. Vietnamese pricing eased somewhat due to limited demand but primarily because of decreasing value of the VND viz USD. The September exports from Vietnam exceeded 10,000mt. This would bring the "guesstimated" official and non-official tally for the year 2011 to around 130,000/135,000mt. Brasil is moving merchandise within the overall world price structure. Brasil exports for September stood at 4,551mt which is the largest single month for 2011. If we assume that 2011 newcrop exports started in July then the total for July-Sept 2011 stands at 7,256mt. The total for Jan-Sept 2011 is 41,970. This would indicate that the carryover from prior years have been dimished and that there should only be about 30,000mt (primarily newcrop) still in Brasil, not including the reduction by the domestic consumption which is around 8,000mt per annum or 650mt per month. Indian new crop seems to be in dire straits this year and first quarter prices out of India will be unobtainable as they will finish exporting whatever they have as Vietnam local prices are much higher than India and traditional Buyers ware already back in India .Whilst we have the present lull, international traders feel that this is a good opportunity to finish buying for 2011 and put on some coverage for 2012.

Recommend highly thes Current prices in India as a window of oppurtunity as once the contract is matured which is trading at a discount compared to available spot raw pepper prices prices are likely to move back to last weeks levels.


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