The Hindu Business Line : Squeeze in pepper supply likely

If the latest reports from the pepper producing countries in the world are any indication, the earlier projections of a tight supply situation in the coming months and a consequent upward swing in the pepper prices cannot be ruled out.

According to a report during the week, pepper production in Vietnam this year is estimated at 80,000-90,000 tonnes, recording a decline of 10-20 per cent from that of the previous year.

The fall in output is attributed mainly to unfavourable weather conditions and pests.

Internal Stockists

Quoting official Vietnam Government export statistics, another report said that the country had exported during January-August , a total quantity of 53,637 tonnes of pepper (both black and white).

This does not include the unofficial trade with Cambodia and China estimated at 5,000 tonnes to 10,000 tonnes. Given this situation, the stocks available in Vietnam is estimated to be somewhere between 25,000 and 35,000 tonnes.

The output in Brazil is estimated to be around 35,000-40,000 tonnes and the harvesting had begun from May onwards and trading was taking place at lower prices. The availability of pepper in India is also said to be limited. The downward trend in the futures market here has influenced the prices of other origins also and as a result they have also brought down the prices.

However, they were seen hesitant, of late, to reduce the prices of their Asta grade pepper, market sources told Business Line.

During the week futures prices declined by Rs 224 to Rs 666 a quintal on NCDEX while on NMCE it was from Rs 285 to Rs 418 a quintal. Turnover during the week went up by 199 tonnes to 1,25,692 tonnes on NCDEX.

However, that for September showed a sharp fall by 21,243 tonnes to 20,681 tonnes. October moved up by 16,194 tonnes to 90,426 tonnes.

On NMCE total turnover declined by 1,620 tonnes during the week to 10,002 tonnes. The total open interest on NCDEX moved up by 511 tonnes to 23,229 tonnes. The September position during the week dropped by 1,829 tonnes to 6,552 tonnes, while October position moved up by 352 tonnes to 10,783 tonnes.

On NMCE total open interest declined by 147 tonnes to 2,223 tonnes. Spot prices in tandem with the futures market trend witnessed a drop of Rs 200 a quintal during the week to close at Rs 12,000 (un-garbled) and Rs 12,600 (MG 1) on Saturday.