The Hindu Business Line : Uptrend likely in pepper prices

Kochi, Sept 21 Pepper futures market witnessed high volatility during the week and the prices were marginally up at close on Saturday. But because of the weak rupee the parity was around $3,100 a tonne (c&f) for Europe and $3,200 a tonne (c&f) for the US.

The weekend market was very slow with not much activity. There was no selling pressure. Turnover dropped sharply by 4,908 tonnes. 1,025 tonnes of September contract were delivered. There was a general feeling of a “calculated attempt to bring down the prices”, market sources told Business Line.

Nearby delivery was available at Rs 500-800 a quintal below spot. But exporters were not interested to cover. Some of the players were liquidating October and switching over to November. In fact, 95 per cent of the position is concentrated in the first three deliveries. Similarly, turnover was also centred in first two deliveries.

TIGHT SUPPLY

Globally, there is a tight supply position. India may be able to ship out around 5,000 tonnes. Indonesia having a small crop of around 10,000 tonnes might not have much to offer. Unconfirmed reports said around 6,000 tonnes of this output had already been sold to the US for future shipping. The availability position in Vietnam is also reportedly thin. The case with Brazil is also said to be not much different.

At the same time, the US, in normal conditions, has a demand of around 20,000 tonnes spread over the next five months. If they decide to cover from the whatever sources available that could push up the prices in the coming weeks, they predicted. The Brazilian Pepper Trade Board analysing the US imports trend has also predicted that there could be a shortfall in supply in the coming months and consequently there were chances for the prices to move up. “We analyse the American imports up to July and find room for some possible bullish trend,” it said.

Latest quoted prices of various origins available on Saturday were Vietnam Asta $3,085 (c&f) US traded. MG 1 Asta traded at $3,150-3,250 (c&f) New York, Brazil Asta $2,650 a tonne (f.o.b.). Brazil B 1 was at $2,600 a tonne (f.o.b.). Vietnam white pepper (double washed) was offered at $4,350 a tonne (c&f) New York.

BEARISH TREND

According to International Pepper Community (IPC) report, black Pepper market showed a bearish trend. During April - July 2008, India shipped only 9,500 tonnes, a fall of 21 per cent from last year’s corresponding period. The recent falling of Indian rupee is expected to have positive impact as price realisation will be better for the exporters and price will be more competitive.

In Vietnam, the market continued to be bearish. Prices were reported to ease further. At Daklak, prices for raw material stood at VND 37,000 a kg. In Lampung, the harvest season has completed with significantly smaller output. Producer’s prices remained stable at around IDR 27,000 a kg with limited activity. In Sarawak, local prices eased marginally by MYR 100 a tonne to MYR 7,830 a tonne at the week’s close, while f.o.b. prices were reported stable. In Sri Lanka, average price at producing areas also was up marginally by two per cent.

WHITE PEPPER

Similar to black, the market for white pepper continued to be quiet. In Bangka, local price eased to around IDR 38,500 a kg from IDR 40,000 last week. In Sarawak local prices of white pepper eased marginally, by one per cent. In Hainan, the price was reported stable.