subject: Intraday Trading Tips Free Trial For Today [print this page] The Malaysian pepper market sees little impact from the launch of the world's first black pepper futures contracts by Singapore Mercantile Exchange (SMX). Leading exporter LHC-SK Sdn Bhd executive Lo Kun Seng said SMX black pepper futures contracts had direct impact on Vietnam but not Malaysia. Vietnam, the world's No 1 pepper producer, is the delivery point for SMX futures contacts which were launched last month.
The contracts, according to SMX, is aimed at creating a new global benchmark for a commodity largely produced in Asia. Lo said Singaporean dealers and exporters had shifted to source pepper mainly from Vietnam, which contributed about one-third of global production, for re-export. Singaporean exporters bought quite significantly from Sarawak in the past few years but they have slowed down, he told StarBiz yesterday.
LHC-SK, which is among Malaysia's top four exporters, shipped more than 19,000 tonnes abroad, mainly to Japan, last year. The company exported between 15,000 tonnes and 18,000 tonnes a year previously. Lo said Malaysia's pepper now fetched higher domestic prices than Vietnam pepper due to the tight supply. There is no much trading activities this year. Local dealers and exporters are hungry and aggressively looking for supply to take up positions, he added.
Kuching Grade 1 black pepper had risen by RM1,400 per tonne to RM17,000 per tonne or up by 9% from last year's close of RM15,600 per tonne. Black pepper gained RM3,500 per tonne or 29% in 2011 and RM2,750 per tonne in 2010 from 2009's close of RM9,350.
Kuching Grade I white pepper is currently trading at about RM25,830 per tonne, an increase of RM980 per tonne or nearly 4% from last year's close of RM24,850 per tonne. White pepper made an impressive gain of RM5,350 per tonne last year or about 27% from 2010's close of RM19,500. The 2009 closing price was RM15,300 per tonne.
Lo is bullish about the domestic pepper market until May when new crops come into the market. In the first half of 2012, pepper prices will be good because of the high demand. This year's supply in Sarawak (which contributes 99% of Malaysia's production) might be lower, he said.
Meanwhile, the government will release data on inflation based on the wholesale price index (WPI) for February 2012 today, 14 March 2012. WPI inflation for February 2012 is projected at 6.7% as per the median estimate of a poll of economists carried out by Capital Market. WPI inflation stood at 6.55% in January 2012.
Foreign institutional investors (FIIs) have made substantial purchases of Indian stocks recently. FIIs bought shares worth a net Rs 872.69 crore on Tuesday, 13 March 2012, as per provisional data from the stock exchanges. At the time of writing, India's key benchmark BSE Sensex is up 150 points at around 17963 while S&P CNX Nifty is higher by 48 points to be at 5477.
EURUSD was continued to be hammered down to as low as 1.3051 on Tuesday as the single currency succumbed to strength in the US Dollar, despite of an upbeat German ZEW data. The pair is currently at 13055. DXY Index, meanwhile, has traded on a strong note today as well, continuing to be supported by strong US data releases and less dovish Fed meeting.
Dollar gained strength as US retail sales picked up in line with the expectations of a 1.1% growth in February, which was its strongest since October 2011.
Retail sales excluding automobiles rose 0.9% during the same period, which was slightly better than the expectations of a 0.8% growth. Meanwhile, Federal Reserve left its benchmark Fed Funds rate unchanged at 0.25% as expected.
Post the rate announcement, the Fed gave a slight upbeat outlook on the US economy, stating that labour sector has improved further. It also added that strains across the global markets have eased modestly.
