The Hindu Business Line : Sluggishness prevails in pepper market

Kochi, June 28 The pepper market in general has been sluggish during the week as the buyers were on a wait-and-watch mode. Because of moderately higher prices at almost all the origins and the economic slowdown in major buying countries on the other, activities were limited.

Availability seems to be getting tight with reported drop in Indonesian and Brazilian crop. The erratic monsoon in India is also believed to have a negative impact on its next crop. Add to this, growers in some originsholding back their produce till the pepper price reaches the levels they expect, market sources told Business Line.

Since, it is a food ingredient, buyers may not be able to stay away from the market for long.

Last week, not much activity was seen in the Indian futures market.

The reports of fall in next crop appear to have influenced the futures prices.

The July, August and September contracts moved up by Rs 22, Rs 37 and Rs 35 a quintal respectively and closed at Rs12,870, Rs13,040 and Rs13,170 a quintal respectively on Saturday.

Total turn over dropped by 3,091 tonnes to close at 12,369 tonnes. Open interest during the week moved up only by 348 tonnes to close at 6,660 tonnes.

Open interest for July fell by 229 tonnes while that of August and September moved up by 505 tonnes and 69 tonnes respectively at the weekend close.

Spot prices however, declined by Rs 100 a quintal to close at Rs 12,300 (un-garbled) and Rs 12,800 (MG 1).

Meanwhile, the import of pepper in May has shown a substantial increase, trading sources said.

As against the export of 1,750 tonnes, imports of black pepper stood at 2,265 tonnes through the Kochi port alone, they said. Much more must have landed in the country with the arrivals through Mumbai, Chennai and Mundra ports, they said.

According to them, as against the April-May exports of 3,245 tonnes, the imports stood at 3,169 tonnes through Kochi port alone.

Indian parity in the international market ruled higher at $2,750 a tonne (c&f). Other origins were also said to be steady or firm.

IPC REPORT

According to International Pepper Community (IPC), the world black pepper market continued to be mixed. In Vietnam, trading was slower and prices were stable locally, while f.o.b. prices eased marginally.

Stock is estimated to be limited, as major portion of this year crop has been shipped out. At HCMC, local prices stood at the level of VND 35,750 a kg.

In dollar terms, however, the prices eased marginally due to weakening Dong against the dollar.

In India, it said, the market slowed down and prices eased. On an average, local prices eased by two per cent and marginally one per cent for f.o.b. Futures prices also eased, by around 1-2 per cent.

In Lampung, small arrivals from this year crop have come to the market. Prices remained stable locally, but f.o.b. was reported to be more competitive.

In dollar terms, local prices eased marginally by one per cent, due to weakening IDR against the dollar.

In Sarawak, the market continued to firm and prices moved up by three per cent from last week.

In Sri Lanka, average prices of black pepper at producing areas were reported up significantly from SLRs 325.14 a kg last week to SLRs373.19 a kg this week.

WHITE PEPPER

The market for white pepper was also steady. Prices at most origins, with the exception of Sarawak, were stable. In Sarawak, local prices rose by two per cent and three per cent f..o.b.

INDONESIAN EXPORTS

During January–March, Indonesia exported only 6,378 tonnes of black pepper as against 15,176 tonnes in the same period last year.

According to the IPC, export from Indonesia this year is estimated to be lower than that of 2008, as output from this year crop, particularly in Lampung, would be significantly lower than last year.

Indonesia exported 36,220 tonnes of black pepper in 2008, recording asubstantial increase from 22,870 tonnes in 2007.

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