The Hindu Business Line : Demand for pepper likely to rise

Cheap and best
In the international market, Indian parity is quoting at $2,650 (c&f).
Futures prices down by around Rs 700 a quintal.
Spot prices also fall by Rs 300 a quintal.

Kochi , Dec. 3

Availability of Indian pepper at prices lower than that of other origins in the world market is likely to push up demand from the US and European Union in the coming days for Dec/Jan.

Turning to India

"Given the cheapest price more business is likely to come to India", market sources told Business Line one Sunday. Some of the buyers in the US and European Union want to cover before going for the X'mas holidays and, therefore, they are expected to turn towards India. Last week, business covering about 350 tonnes of pepper was concluded, they said.

However, availability of ready pepper in the market here is very thin and what is available at present in sizeable quantity is only with the exchanges. The stocks held by two major exchanges are estimated at 10,000 tonne while the net open position as on December 2 was 23,000 tonne, they said. In the international market, Indonesia, which does not have much to offer, was quoting $2,900 a tonne while Vietnam was offering V Asta at $2,700 a tonne (f.o.b.). Brazil was quoting Asta grade at $2,700 a tonne (f.o.b.) and at the same time Indian parity is at $2,650 (c&f).

As the December delivery is nearing maturity market players holding long positions have started liquidating long positions. This indicates the lack of confidence in them about the quality of the commodity held in the warehouses, they alleged.

Thus, liquidation coupled with rumours being spread in the market that harvesting in Vietnam, which has to normally begin after mid-February, would commence this month and the production there would be more than that of last crop, has pushed down the futures prices during the week by around Rs 700 a quintal. Spot prices also, as a result, fell by Rs 300 a quintal, they said.

According to trade estimates the pepper production in the country this year is likely to be below 50,000 tonne. Farmers in Wayanad and in some other districts of Kerala said that though there were good rains it was unfavourable and erratic this year.

It had negatively affected the crop. Incessant showers after a good flowering had failed the pollination process, which in turn had badly hit the berry formation, they claimed.