The Hindu Business Line : Pepper down on selling pressure

The reported decision of the State Government authorities to tax the stock held by the traders seems to have compelled them to liquidate it before March 31. Besides, the State Government agency, Marketfed (Cooperative Marketing Federation), is said to have slowed down procurement of pepper for want of adequate funds. These two factors have led to a selling pressure pushing the prices down, market sources here told Business Line.

Marketfed had procured around 3,500 tonnes of pepper at Rs 75 a kg taking a loan from the State Cooperative Bank. Spot prices of MG 1 and un-garbled, which had moved up to Rs 7,100 and 5,600 - 6,600 a quintal on last Thursday is said to have showed a downward swing now following selling pressure, they claimed.

Upcountry buyers have not been showing interest due to the uncertainty over VAT. Some of the traders here alleged that the Government had made some amendments based on which they were being asked to pay tax on the stock held by them before March 31.

In the international market, buyers are waiting for the prices to drop further. In Vietnam, it was slower on some selling pressure. ASTA grade was on offer at $1,250-$1,350 a tonne. However, pepper of this grade is said to be difficult to get.

The impact of the severe drought in Vietnam on pepper plantations is yet to be known.

According to the initial assessment by the Jakarta-based International Pepper Community (IPC), the production is likely to be down by 10 per cent this year from 85,000 tonne in 2004. The projection for the current year is 95,000 tonne.

Indian production, according to traders' estimates, is around 75,000 tonne. The carry forward stock is estimated at 20,000 tonne as against last year's production of 55,000 tonne and a carry forward stock of 15,000 tonne.

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