The Hindu Business Line : Pepper prices rule firm on tight supply

Kochi, March 9 Tight supply position, even after the harvesting has reached its full swing in Vietnam, has kept the prices moving up in all the origins except India during the week. Soaring white pepper prices are said to have motivated Vietnam to convert its heavy pepper in to white, which in turn has squeezed the availability of asta grade pepper there.

However, the Indian futures market witnessed a sharp fall for all contracts during the week consequent to the drop in the stock markets and the resultant liquidity crunch, market sources told Business Line. The spot prices fell by Rs 500 a quintal during the week to close on Saturday at Rs14,300 (un-garbled) and Rs14,900 (MG1). As the financial year is coming to a close, there was some selling pressure. Buyers were also not interested.

All the contracts on NCDEX showed a sharp fall from Rs 1,104 to Rs 1,216 a quintal while on NMCE, the drop was from Rs 820 to Rs 1,350 a quintal.

Total turn over on NCDEX fell by 28,457 tonnes to 89,692 tonnes while on NMCE, it declined by 2,373 tonnes to 8,200 tonnes. Total open interest during the week dropped by 3,292 tonnes to 22,085 tonnes. March and April positions fell by 1,135 tonnes and 3,.311 tonnes respectively. On NMCE, the total open interest declined by 136 tonnes to 1,803 tonnes. Meanwhile, an overseas report quoting the Chairman of the Viet Nam Pepper Association, has said that Vietnam “pepper output this year fell by 10 per cent to 90,000 tonnes”.

Brazil report

According to the Brazil Pepper Trade Board, “Pepper prices firm all the week with some more buyers interested”. Brazil sold on Friday some lots of B2 500 GL at prices between $3,900 and $3,950 (f.o.b.). Other origin prices were said to be: India $4,000 a tonne (c&f), Vietnam 500GL $3,970, V 550 GL $4100 and tonne (f.o.b.) and Indonesian L Asta at $4,200 a tonne (f.o.b.). According to the International Pepper Community report, during the week, on an average black pepper prices at HCMC were 5-6 per cent higher compared to last week. It is reported that harvesting season in Vietnam has begun and output is expected to reach 90,000 mt. It is estimated that around 25 per cent of this year’s crop has been harvested.

In Sarawak, local prices increased further from MYR 9,538 a tonne to MYR 10,000 on March 6. F.o.b. prices experienced a significant increase of $750 a tonne from $3,850 a tonne at beginning of the week to $4,600 on the following days.

There was no specific reason reported for the significant change. On an average, prices in Kuching increased by six per cent locally and 15 per cent f.o.b. In Lampung, local prices also increased by two per cent. In Sri Lanka, average price of pepper at producing areas increased significantly from SLRs 333.85-353.86 a kg during the week.