The Hindu Business Line : Pepper slips on quality concerns

In fact, the Indian pepper is currently in an advantageous position as "we are at parity with other origins; some business is taking place with overseas buyers and there is no selling pressure in the spot", market sources told Business Line.

Nevertheless, the futures market is on the decline, indicating that "the quality is being played with and buyers have been driven away", the sources alleged.

Competitive prices

Given this scenario, there are chances for more business. The decline in the stock markets and a consequently weakened rupee against dollar has kept Indian pepper prices at competitive levels.

Vietnam has offered its ASTA grade at $1,675 a tonne (c&f) as against India's parity of $1,625-$1,650 a tonne (c&f) and Indonesia's $1,650 and Malaysia's $1,700 a tonne.

On the other hand, there is no selling pressure in the ready market, where the prices of un-garbled and MG 1 ruled steady at Rs 6,500 and Rs 6,900 a quintal respectively.

IPC COMPOSITE PRICE

According to an IPC report, Pepper Price Index rose by 0.2 point in May 2006 for black pepper and 0.7 point for white pepper. Average f.o.b prices of black pepper at Kochi went down, but increased at Kuching and Ho Chi Minh City. At Lampung, prices were reported unchanged. Average f.o.b prices of white pepper at Sarawak and Hainan went up during the month, but were stable in Bangka.

The market for black pepper showed a mixed trend during May 2006. At Ho Chi Minh City, the market remained active and prices increased from VND 18,300 per kg to VND 19,400 in the local market and $1,180 per tonne to $1,240 f.o.b for black 500g/l. Compared to the previous month, the average price was up by 3 per cent. During May 2006, Vietnam reported it had shipped out a large portion of this year's crop and stock availability in local markets was limited.

Lower crop seen

In Sarawak, prices at local markets increased from MR 448 per 100 kg to MR 460, while f.o.b prices showed a significant increase of $100 per tonne from $1,650 per tonne at the beginning of the month to $1,750 at the month's close. The increase was due to tight stocks, while material from this year's crop is expected to arrive in the market end-June. This year's crop is expected to be lower.