The Hindu Business Line : Indian black pepper could enjoy advantage in Jan-March

THE likelihood of short supply from other origins in the global market in the first quarter of next year could place Indian black pepper at an advantageous position provided the prices also remain at acceptable levels.

Brazil is understood to have marketed almost 75 per cent of its produce while Indonesia does not have much to offer in the coming months.

Meanwhile, Vietnam, the world's largest producer of black pepper, is not offering ASTA grade.

Thus, the situation is in India's favour during January-March 2006, market sources told Business Line.

From April onwards, international buyers will turn towards Vietnam, as its new crop would hit the market by then.

However, the prices have to remain at the current levels, which is around $100 above the other origins. Since Indian pepper enjoys a premium, buyers are ready to offer a higher price for MG 1, the sources said.

Currently, Indian parity is $1,700-1,725 c.i.f. a tonne. Indonesia was quoting $1,600-1,650 and Brazil $1,525-1,550.

The prices ruled steady in the domestic market during the weekend on reports that the State procurement agency, the State Co-operative Marketing Federation (Marketfed), had called for tenders for liquidating around 4,000 tonnes procured by it during the last season.

The domestic market is also anticipating that there would be a short supply from the indigenous production, which is expected to be down by around 30 per cent because of the incessant and widespread rains during the year.

Already, harvesting has been delayed by a month. Green pepper is being bought by industries producing pepper in brine and dehydrated green pepper at prices of Rs 20-25 a kg.

The picking of green pepper has just started in certain areas by the farmers themselves, as employing labour has become uneconomical due to low yield.

Add to this, Sri Lanka has also slowed down exports to India due to the increase in prices here.

At the same time, the demand in North India has picked up following the cold wave there. The domestic industrial demand has also picked up now. The grinding industry absorbs around 50 per cent of the domestic production.

According to the industry sources, the industry is also now looking for good quality pepper.

Given this scenario, the prices are likely to move up further. But if the difference between the Indian parity and that of other producers widens, it might have a negative impact on the exports. However, the international availability next year is predicted to be less by around 33,000 tonnes.

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