The Hindu Business Line : Pepper prices improve on buying support

PEPPER prices improved in the international and domestic markets on buying support following the delay in harvesting in Vietnam which has yet to reach its full swing.

As a result the international players who had been waiting for long had slowly started buying from Indonesia and Brazil, market sources told Business Line. They said the arrival from Vietnam has yet to pick up. A new set of international players who had taken short positions is hectically covering with whatever available in Vietnam now, they said.

Vietnam was offering 500 GL at $ 1,250 and 550 GL at $ 1,350 a tonne. While Brazil-asta grade was being quoted at $ 1,450 while Indonesia was also quoting L-asta at $ 1,450 a tonne. Where as, the Indian parity was at $1,650.

According to them if the difference between the prices of these origins are of India is reduced to less than $150-200 per tonne, orders could come for genuine MG1 from India from select markets in the US, Europe, Japan and Australia. Enquiries are in fact floating for "genuine MG1", they said.

The sudden change in the market has attracted more new entrants who are buying spot and selling futures as the latter was fetching a premium price. In fact, this phenomenon has revived the terminal market despite the thin arrivals of five tonnes a day, they pointed out.

There seems to be something wrong with the Vietnamese crop, they said. The IPC is understood to be sending a delegation of representatives from pepper producing countries comprising of officials and trade representatives to Vietnam.

Besides, unusual heavy rains accompanied by winds in Indonesia and also heavy rains in Malaysia reported to have a negative impact on the pepper crop in these countries, they said.

The domestic demand continues to be good. Harvesting in the Coorg region would reach its full swing in two weeks time. Production there is estimated to be around 20,000 tonnes.

The overall Indian production according to the trade is to be around 60,000 tonnes. The domestic demand is estimated at over 50,000 tonnes.

Prices on Tuesday both spot and futures have shown an upward trend. MG 1 and Un-garbled was sold at Rs 7,100 and Rs 6,800 a quintal at the terminal market here as against Rs 6,900 and Rs 6,600 respectively on March 6, registering an increase of Rs 200 a quintal.

The futures prices at today's close were March Rs 7,314 a quintal as against Rs 7,100 last Saturday. April Rs 7,625 (Rs 7,382), May Rs 7,817 (Rs 7,568), June Rs 7,972(Rs 7,720), July Rs 8,194 (Rs7,935) and Aug Rs 8,299 (Rs 8,037).