No clear estimates on Vietnam black pepper output

Contradictory views are being aired on the latest estimates of global production of black pepper although harvesting in Indonesia and Brazil is yet to begin.

According to a section of experts and exporters, the drop in production in Vietnam would be much sharper than the earlier estimates of Vietnam Pepper Association (VPA).

The association had predicted a 10 per cent drop from 105,000 tonnes in 2006, but production may drop even further to 88,000 tonnes.

Total demand, increasing by 3-4 per cent worldwide, might touch 300,000 tonnes, while global production is estimated to be 266,000 tonnes.

However, a Kochi based expert said the production in Vietnam would not drop beyond the level of 95,000 tonnes. In 2006 also, VPA had predicted a sharp decline in production but had touched an all-time high of 105,000 tonnes.

"The new theory on world production may be a fabricated one," he added.

There are reports from Indonesia that the crop output will be better this time and it might touch 20,000 tonnes. But there is no clear indication from Brazil, which has an average annual production of 35,000-37,000 tonnes.

Major importing nations especially from Europe and North America are watching the market closely, but not actively buying.

These countries have adopted a 'wait-and-watch' approach although India has low price tags. European importers expect a drop in prices in a couple of months as stock position in India and Vietnam is rather high. And once Indonesian crop hits the market, trade may be on a bear mode.

The lowering of prices in Vietnam also indicates such a situation. Vietnam has dropped the tag for 500 GL to $3250 a tonne today from $3440.

Meanwhile, the downward trend in the domestic futures counters continued today as all the contracts on NMCE counters today quoted lower by Rs 100-200 a quintal.