The Hindu Business Line : Pepper prices witness easy trend during Nov

World pepper prices, which showed significant growth from July to October this year compared with the previous year, dropped substantially in November.

Meanwhile, it is reported that Vietnam production of pepper in 2007 may be less by 20 per cent due to disease outbreak. A similar situation might emerge in Indonesia where due to the unfavourable price situation, many farmers in Bangka were reportedly shifting their activities from pepper to other crops such as rubber, which give better returns. The current Indian production is also said to be less. Notwithstanding, prices are currently on a declining trend, market sources said.

Price index

The pepper price index of the International Pepper Community (IPC) fell in November last by 11.9 points for black pepper, while it was 8.5 points for white pepper. Average f.o.b prices of black and white pepper at source markets fell, with the composite price for black pepper coming down by 9 per cent and white pepper by 6 per cent, according to IPC sources.

Prices at origins indicated a significant fall compared with prices during the previous month. This situation was attributed to buyers' reluctance to make commitments at current levels. They preferred to take a wait and watch approach and enter the market if and when prices became more competitive, possibly in early 2007, when Indian and Vietnamese pepper were expected to come in the market, sources said.

Trading activity

At the start of November, the market at Kochi was quiet and prices eased significantly from $2,760 a tonne f.o.b from October-end to $2,495. The price closed at $2,540 a tonne at the month-end. On an average, the price eased by 10 per cent compared with the average price in October. At Ho Chin Minh City, Vietnam, the market remained inactive, with limited trading. Buyers were looking to purchase for the first quarter 2007.

During November 2006, prices at HCMC decreased significantly from $2,500 a tonne f.o.b for 500g/l black to $2,150 at the month's close. On an average, the price of black pepper at HCMC during November 2006 was lower by 16 per cent, compared with October.

Official sources in Vietnam reported that up to October 2006, Vietnam had exported one lakh tonne of pepper, which was estimated to reach 1.1 lakh tonne by December 2006.

In Lampung, the market was also quiet with limited activity. Stocks in the domestic market have been very tight, but the local price declined steadily from $2,580 a tonne to $2,295 at the month's close.

The situation was affected by weak overseas demand. The price decreased marginally by 8 per cent for pepper at local markets and 13 per cent for f.o.b, compared with the average price during the previous month.

In Sarawak, the market was also quiet and prices at local markets decreased from $2,250 a tonne to $2,188 at the month's close. Under such conditions, however, it was very difficult to get material. Compared with the previous month, the average price was lower by 4 per cent, while f.o.b prices, however, were reported stable at $ 3,200 a tonne.

In Sri Lanka, the price in pepper growing areas also declined steadily from $ 2,267 a tonne to $ 1,863.

White pepper

The market for white pepper was also quiet and prices dropped steadily during the month. In Bangka, trading was very limited. Tight stocks in addition to lack of demand contributed to the situation. The local price for white pepper came down from $3,460 a tonne to $3,115 at the month's close. The f.o.b price decreased from $3,790 to $3,749. On an average, local prices decreased by 7 per cent and f.o.b prices by 8 per cent.

In Sarawak, local prices decreased from $3,257 a tonne to $3,034 at the month's close, while f.o.b prices fell from $4,400 a tonne to $4,180. The monthly average local price decreased by 6 per cent and f.o.b prices by 2 per cent.

In Hainan, prices of white pepper fell from $3,000 to $2,800 a tonne locally and $3,200 to $3,000 a tonne f.o.b. At HCMC, the f.o.b price of white pepper eased significantly from $3,700 to $3,200 a tonne.

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