Exporters take a knock as pepper prices plunge

The black pepper futures market is currently in a bearish mode, upsetting exports and sending domestic spot prices crashing heavily.

In just a couple of days, the market has crashed by Rs 900 to Rs 13,950 a quintal from Rs 14,300 in the near-month contract.

Exporters and major dealers are worried about the 'unnatural' behaviour of the market as the global mart is fairly bullish because of lower production. They said they were surprised as all the parameters were poised for a bullish trend since the other producing nations had raised their tags considerably. Interestingly, the futures market was soaring high in the past few months and the spot prices also rose to Rs 14,800 a quintal.

However, leading exporters here said that like in the rubber futures, the pepper mart is plummeting as it is being deliberately planned. They said although there is good overseas demand, there is no chance to take more orders because of the lowering of position limit in the near month contract.

Meanwhile, Indonesia and Malaysia have substantially increased their tags for ASTA and both countries are now quoting $4200 a tonne. Vietnam is offering only 500 GL and 550 GL and not indicating price of ASTA grade pepper. Vietnam offers 500 GL at $3360 and 550 GL at $3560.

Vietnam is learnt to have a stock of 40,000 tonnes and is not selling aggressively. The country may hold back 15,000 tonnes, anticipating lower production in the 2008 season. Vietnam expects the stock to be exhausted by the year-end on the expected European orders in the coming months.

Brazil's output is estimated at 35,000 tonnes in the next season beginning September. The indicating price is $3800 for BASTA and India is also quoting the same rate. Meanwhile, Vietnam had exported 6039 tonnes in June, of which India imported 350 tonnes. Egyptian imports from Vietnam ranked the highest with 517 tonnes, followed by UAE with 368 tonnes.