Global output projections pull down pepper prices

Pepper futures last week witnessed a sharp fall at the weekend on reports of an increased output in 2012 raising the availability of the commodity for the remaining months of the current year.

Cued by this report, based on the projections made at the International Pepper Community (IPC) session held in Colombo, the Indian futures prices fell sharply.

Consequently, domestic buyers and sellers stayed away from the declining market.

As the difference between Nov and Dec contracts narrowed down, there was switching over from November.

As wet conditions prevailed from midweek onwards last week there was a squeeze in arrivals.

On the spot, the buyers and sellers stayed away from the declining market. The primary market dealers/farmers said to have sold good quantities when the prices were ruling high, market sources told Business Line .

As the prices were shooting up, more and more sellers were seen appearing earlier in the week in the primary markets and releasing old stocks of pepper. But, the situation changed at the weekend.

All the active contracts last week decreased sharply on the bearish reports from overseas.

Nov, Dec and Feb contracts fell by Rs 1,370, Rs 935 and Rs1,260 respectively a quintal to the last traded price (LTP) of Rs 42,650, Rs 42,450 and Rs 37,600.

Total turn over increased by 6,341 tonnes to close at 12,479 tonnes at the weekend close. Total open interest moved up by 171 tonnes to 8,938 tonnes.

Spot prices, in tandem with the futures market trend, fell by Rs 700 to close at Rs 40,000 (ungarbled) and Rs 41,500 (garbled) on Saturday. Meanwhile, Indian imports of pepper have shown a substantial increase during Jan–Sep, from the corresponding period, last year. In the first nine months, imports have gone up by 21.56 cent to 11,732 tonnes (from 9,651 tonnes the previous year).

Where as, the exports increased only by 5.27 per cent to 13,992 tonnes (13,291 tonnes), according to export sources.

Much of the shipments were of material imported for value addition and re-export, they claimed.

IPC OUTPUT PROJECTIONS

According to the IPC projections in Colombo,, the total global production would be at 3,27,090 tonnes with an exportable surplus of 3,36,780 tonnes.

Where as, the production and exportable surplus in 2013 is forecast at 3,16,832 tonnes and 3,19,098 tonnes respectively.

The Indian total output has been given as 43,000 tonnes in 2012. A carry forward stock of 15,816 tonnes and import of 16,250 tonnes have been shown. Domestic consumption in 2012 has been put at 42,500 tonnes while the exports have been estimated at 17,500 tonnes.

As against these, the production in 2013 has been projected as 55,000 tonnes and a carry forward stock of 15,000 tonnes. The domestic consumption and exports in 2013 has been shown as 43,000 tonnes and 25,000 tonnes respectively.

In the international scenario, multinational companies with multi-origin operations having processing facilities in Vietnam were reportedly importing pepper from Indonesia for meeting their export commitments of LBV pepper, market sources said.

Meanwhile, the trade here found it difficult to swallow the production figures of Indonesia for 2012 as 63,000 tonnes with an exportable surplus of 62,614 tonnes.

Where as, the production in 2013 has been projected as 47,000 tonnes with an exportable surplus of 43,614 tonnes.

In 2011 Indonesia produced 45,000 tonnes of pepper and exported 36,487 tonnes.