Indian pepper futures seems to have become a trend-setter in the world pepper trade as all the origins are following meticulously the development of the market and accordingly fixing their prices slightly below the Indian parity and cornering the world demand.

As a result, the prices of Asta grade in the producing countries such as Vietnam, Indonesia and Brazil have been ruling above $6,000 a tonne (c&f) all these days. Of late, in line with the firmer trend in India, Vietnam prices were reportedly on a firmer trend, market sources told Business Line .

The money and muscle power of the operators has been keeping the market highly volatile and keeping the market by and large bullish during the week.

At the same time, the domestic market has been catered to by Karnataka pepper offered at lower rates at Rs 260-265 a kg delivered anywhere in India.

Meanwhile, the growers in the plains of Kerala were also selling at Rs 270-275 a kg to investors for depositing in the warehouses. But the sellers in the high ranges were reluctant to sell the high range pepper at Rs 280 and below per kg, they said. At the same time, some of the players were showing interest to buy high bulk density high range pepper even at a premium. To match the offered prices some of the Idukki sellers in the high ranges were buying Kodagu pepper, which is bold resembling the high range produce and available at lower levels, for mixing with their pepper and marketing, reliable market sources claimed.

warehousing

However, there is a reported shortage of space in the warehouses as more and more players have started buying and processing the material paying Rs 9/kg for depositing, they said. As the prices are moving up the sellers will withdraw. On the other hand, the industry which has been buying only hand to mouth might continue to buy even in the monsoon month. These factors would keep the prices firmer in the coming days, they claimed.

The market witnessed a bullish upper hand last week as a result the prices went up sharply in all the contracts. June, July and August increased by Rs 1,059, Rs 1,311 and Rs 1,189 respectively to close at Rs 30,249, Rs 30,135 and Rs 30,018 a quintal. Total turn over dropped by 3,661 tonnes to 39,101 tonnes. Total open interest fell by 1,644 tonnes to close at 12,515 tonnes.

Spot prices also went up on buying support by Rs 700 to close at Rs 27,800 (ungarbled) and Rs 28,600 (MG 1) a quintal at Saturday closing.

Indian parity in the international market has touched $7,000 a tonne (c&f). Vietnam is also reportedly up at the weekend quoting $5,600 a tonne for FAQ 500 GL.

TREND IN OTHER ORIGINS

According to International Pepper Community (IPC), in some origins, price increase was observed, but activities were very limited. This was due to very tight stocks available in major origins such as India and Lampung.

In Lampung, local price increased by IDR 2,000 a kg from IDR 42,000 to IDR 44,000 this week; but trading activity at local market was dormant, since stocks at grower were almost worn out. New material from upcoming poor crop is expected to arrive in the market by July/August.

In Vietnam, local price in HCMC decreased by 3 per cent, but in fob the prices remained stable at $5,250 and $5,750 a tonne for 500g/l and 550g/l respectively.

In Sarawak, local price dropped marginally, while in fob, the price was stable. In Sri Lanka, pepper price at growing areas increased by1 per cent.

In Brazil, the market was inactive. Stock is very tight and exporters do not want to take risk to book future short.

WHITE PEPPER

In Bangka and Vietnam, white pepper prices were stable, while in Sarawak a slight decline was recorded.

EXPORT FROM VIETNAM

During 2010, Vietnam exported 1,16,500 tonnes as against 1,34.300 tonnes of pepper in 2009. Out of which around 80 per cent was black and 20 per cent was white pepper. Export in 2011 is estimated to be lower than that of last year.

Up to May 2011, total export from Vietnam is estimated to be around 50,000 tonnes, which is 9,000 tonnes lower than the corresponding period. The U.S. and Germany were the main markets for Vietnamese pepper, followed by the Netherlands, the UAE and Egypt.

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