The Hindu Business Line : Pepper exports down on higher global price

Total exports from the six producing countries during this period were down 16 per cent to 70,053 tonne from 83,553 tonne in the same period last year. The declining trend is said to have continued in June too.

"Everybody has so far been buying hand to mouth, just to meet the immediate commitment, and hence there hasn't been any excessive buying on the anticipation that the prices would come down," Mr Kishor Shamji, an Exporter and former President of India Pepper and Spice Trade Association (IPSTA) told Business Line. They expected the price to fall to $1,000 per tonne. Instead, they remained on an average at around $1,400 per tonne during January-June period, he pointed out. Major operators in the US, Europe, Singapore were taking limited short positions. Meanwhile, each producing country has taken the position not sell below $1,500 a tonne. The Vietnam Pepper Association (VPA), early this year, had intervened and advised growers not to sell their produce below $1,200 per tonne. The efforts seemed to have yielded results. There has been no selling pressure.During January-May this year, around 32,232 tonne of pepper was exported from Vietnam.The production may not be at the levels as has been projected by the world pepper trade. Brazilian Association was quoted as saying that their production was going to be less by 20-25 per cent from the projected 40,000 tonnes, as heavy rains in February had affected the crop. Similarly, market sources said Vietnamese production was also not at the projected levels. Production in Malaysia, which has started harvesting, is reported to be slightly higher by around 5,000 tonne at 27,000 tonne this year as against the estimated 22,000 tonne, according to IPC.

Meanwhile, the official Indian production is projected at 65,000 tonnes while the trade has estimated it at 50,000-55,000 tonnes. The domestic consumption here is somewhere between 45,000 and 50,000 tonnes now and "then there is very little quantity left for export", they said.

On the other hand, according to them, demand growth in the world pepper market is 7-10 per cent instead of the 3 per cent projected by the international players owing to increased usage of pepper by the industry.

This segment has to keep inventory for 2-3 weeks and hence cannot afford to wait for long for the prices to fall to $1,000 and below.

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