The Hindu Business Line : Pepper prices likely to turn hot

The current thin supply position, a steady market with a good potential demand from overseas, following the extension of export subsidy, may lead to an upward swing in the pepper prices next week.

At present, pepper is available in India and Vietnam and the price difference between the two is around $200 a tonne. Vietnam is offering ASTA grade at around $1,500 a tonne (c&f) as against the Indian parity of $1,700 a tonne (c&f). As the Malabar Gold fetches a premium price in the international market, there could be orders emanating from the selected pockets in the US, Canada, Europe, Australia and Japan, market sources here told Business Line.

INDICATIONS

Increased buying activity of the local arm of the multinational companies during the week at Rs 69.25-69.50 a kg to cover their commitments could be an indication of the short supply. They bought an estimated 100 tonne last week and during the week, whatever quantity arrived were also bought by them regularly, they claimed.

The market has become active only after the announcement of extension of export subsidy by March-end and the calling off of the 8-day long strike by the trailer workers early this week.

SLACK GLOBAL DEMAND

The domestic demand is good. However, it is met by and large by supplies from the Kodagu region. At Rs 74 a kg pepper is delivered anywhere in India from Chikmagalur and Sakleshpur in Karnataka, the sources said.

But, the demand from overseas market is yet to come, as the International players had been waiting and watching.

Futures prices are also likely to move up. Spot prices ruled steady at last week-end level of Rs 7,150 a quintal for MG1 and Rs 6,750 a quintal for ungarbled.