The Hindu Business Line : Global pepper prices likely to move up

Kochi, Sept 28 The international pepper market appears to be facing a tight supply position when there is every possibility of potential demand emerging in the coming weeks from the US and European markets to cover for their uncovered portion of the winter/New Year requirements. However, it might depend on how far the crisis in the US economy is going to impact the pepper market there.

Any way, the pepper prices have moved up during the week and an upward swing is seen in the international market also.

All the contracts went up during the week and the increase was from Rs 736 to Rs786 a quintal on NCDEX and on NMCE, it was from Rs 686 to Rs 829 a quintal.

Total turn over on NCDEX moved up by 3,677 tonnes to 51,178 tonnes. Total open interest increased by 955 tonnes to 18,322 tonnes at Saturday close.

Spot prices went up by Rs 300 a quintal during the week to close at Rs 13,100 (un-garbled) and Rs 13,700 (MG 1) at the weekend.

The people, by and large, are loosing confidence in the futures market because of the uncertainty about the delivery and the quality of the material. Besides, most of the brokers have reached their 1,000-tonne limit and, hence, they cannot make any additional commitments, Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), told Business Line.

In India, the stock position with the exchanges is estimated at around 5,000 tonnes. Stock position on the NCDEX on September 22 was at 4,626 tonnes. The farmers, who are said to be holding stocks, are not ready to part with their produce at the current price. Therefore, we may not have much to offer, trading sources said adding there is going to be strong domestic demand in the coming days.

Indonesia

Indonesia, where harvesting has come to an end, the crop was estimated to be around 10,000 tonnes. Unconfirmed reports from overseas have said that Indonesia was selling its new crop slowly to end users in the US without disturbing the market at $3,500-3,525 a tonne (c&f).

Vietnam and Brazil

Vietnam and Brazilwere reportedly firmer and had raised their prices in recent days. The US is said to have covered up to September and fresh demand has to emanate from October onwards. The supply position in Vietnam is also getting tighter with the stocks depleting. Similar situation is in India also. India is said to have concluded some business during the week to ship 200-300 tonnes of black pepper at $3,200-3,300 a tonne (c&f).

In Lampung, the harvesting is over with output lower significantly. Prices at growing areas were on the upward trend, according to the International Pepper Community (IPC).

In the world scenario, an IPC report said, the black pepper market showed a mixed trend during the week. In India and Indonesia, prices moved up. In Sarawak, the price was relatively stable, while in Sri Lanka the price was down.

In Vietnam, prices have improved slightly with limited activity. At Daklak, prices for the raw material moved up to VND 38,500 a kg from VND 37,000 last week.

In Sarawak, local prices eased marginally from MYR 7,830 a tonne to MYR 7,770 at the week’s close. In dollar terms, however, the prices were relatively stable due to strengthening Malaysian ringgit against the US dollar. Free-on-board prices of Sarawak black were reported stable. In Sri Lanka, average price at producing areas declined by five per cent.

WHITE PEPPER

In Bangka, the market for white pepper continued to be quiet, local price was reported stable at around IDR 38,500 a kg. In dollar terms, price of Muntok white improved slightly. In Sarawak, local prices of white pepper eased marginally from MYR 13,730 a tonne to MYR 13,670 at the week’s close. In dollar terms, however, the prices were relatively stable.