 "Global pepper market faces tight supply")
The global market in black pepper is likely to be tight for the next two to three weeks, with the supply from Vietnam, the largest producer, not having picked up as expected. The harvesting season is on there but the initial output is not as expected.
Both European and US takers are not actively buying, waiting instead for some relief on prices. A fortnight’s holiday in Vietnam in connection with the lunar new year, commencing from the 26th of this month, also makes the market rather passive. Vietnam currently offers ASTA-grade pepper at $7,700/tonne, the 550 GL grade at $7,200 and the 500 GL grade at $6,900/tonne. These are the lowest tags across the globe; yet, demand is not strong. US and European buyers appear to be waiting for a fall to about $7,500 a tonne for the top grade before placing bulk orders.
India currently has the highest price across the world. It now quotes $8,625 a tonne for the top grade, Indonesia $8,350 and Brazil offers $8,100. In April-September 2013, India exported 10,200 tonnes and the year’s total is likely to be 16,000-17,000 tonnes. Some leading exporters expect it wouldn’t exceed 15,000 tonnes. In fact, they told Business Standard, we might be a net importer this financial year, since Vietnam’s prices are attractive for value-added product makers and even for re-exporters. Our import in 2013-14 is likely to be 15,000-18,000 tonnes.
With supply from other countries low for the time being, the global market has to depend on Vietnam. Production might be 125,000-140,000 tonnes there in this season. Harvesting in Indonesia, the second largest producer, begins by June. In India, output is expected to drop this time by 30-40 per cent. Leading exporters say supply from southern Kerala, from where harvesting begins every year, has yet to pick up. Normally, the new harvest comes from the southern districts in December. Benny Chacko, a farmer from Idukki district, says as there is good demand from Sabarimala pilgrims, a major part of the fresh harvest is moving there. Supply to the Kochi wholesale market is likely to pick up after the Sabarimala mandalam season. The new crop from Idukki and Wayanad is expected to come during the last week of this month. Reports from these districts indicate production would be lower by 40 per cent. Local merchants and exporters are hitch their hopes on Karnataka, where harvesting begins next month.
So, India is likely to be a net importer this year, since the local market requires roughly 25,000 tonnes; the crop might not exceed this level; it could even be lower.
An exporter told Business Standard that the price would have been above Rs 600/Kg, but apprehension over the stocks in exchanges makes the market sluggish. Roughly 7,000 tonnes are awaiting the final results of mineral oil test. This is a major supply concern at present.
According to exporters Vietnam would control the global market till mid of this year as they only can supply in bulk quantities as of now. The market expect some relief after the Lunar New Year holidays, harvesting will pick up after the holidays. Both US and European buyers wait for supply to pick up and they are expected to place orders once price drops to $7,500/tonne. Vietnam exporters are now on a dilemma as they had contracted for January shipment at lower tags earlier, expecting a good intitial supply. Now they have to buy at higher prices to meet the commitments. This also makes the market stronger in the current week.
Both European and US takers are not actively buying, waiting instead for some relief on prices. A fortnight’s holiday in Vietnam in connection with the lunar new year, commencing from the 26th of this month, also makes the market rather passive. Vietnam currently offers ASTA-grade pepper at $7,700/tonne, the 550 GL grade at $7,200 and the 500 GL grade at $6,900/tonne. These are the lowest tags across the globe; yet, demand is not strong. US and European buyers appear to be waiting for a fall to about $7,500 a tonne for the top grade before placing bulk orders.
India currently has the highest price across the world. It now quotes $8,625 a tonne for the top grade, Indonesia $8,350 and Brazil offers $8,100. In April-September 2013, India exported 10,200 tonnes and the year’s total is likely to be 16,000-17,000 tonnes. Some leading exporters expect it wouldn’t exceed 15,000 tonnes. In fact, they told Business Standard, we might be a net importer this financial year, since Vietnam’s prices are attractive for value-added product makers and even for re-exporters. Our import in 2013-14 is likely to be 15,000-18,000 tonnes.
With supply from other countries low for the time being, the global market has to depend on Vietnam. Production might be 125,000-140,000 tonnes there in this season. Harvesting in Indonesia, the second largest producer, begins by June. In India, output is expected to drop this time by 30-40 per cent. Leading exporters say supply from southern Kerala, from where harvesting begins every year, has yet to pick up. Normally, the new harvest comes from the southern districts in December. Benny Chacko, a farmer from Idukki district, says as there is good demand from Sabarimala pilgrims, a major part of the fresh harvest is moving there. Supply to the Kochi wholesale market is likely to pick up after the Sabarimala mandalam season. The new crop from Idukki and Wayanad is expected to come during the last week of this month. Reports from these districts indicate production would be lower by 40 per cent. Local merchants and exporters are hitch their hopes on Karnataka, where harvesting begins next month.
So, India is likely to be a net importer this year, since the local market requires roughly 25,000 tonnes; the crop might not exceed this level; it could even be lower.
An exporter told Business Standard that the price would have been above Rs 600/Kg, but apprehension over the stocks in exchanges makes the market sluggish. Roughly 7,000 tonnes are awaiting the final results of mineral oil test. This is a major supply concern at present.
According to exporters Vietnam would control the global market till mid of this year as they only can supply in bulk quantities as of now. The market expect some relief after the Lunar New Year holidays, harvesting will pick up after the holidays. Both US and European buyers wait for supply to pick up and they are expected to place orders once price drops to $7,500/tonne. Vietnam exporters are now on a dilemma as they had contracted for January shipment at lower tags earlier, expecting a good intitial supply. Now they have to buy at higher prices to meet the commitments. This also makes the market stronger in the current week.