Pepper prices move north on demand

International pepper prices are seen moving up on expectations that demand from European countries will lead to improvement in sentiments. Domestic exporters were confused as the volatile market was not giving any clear signals.

Reports on low inventories in Europe and USA has slightly appreciated Brazil's price tags for black pepper, while other major producers have quoted almost steady or slightly lower tags.

According to sources, Europe and USA had to cover for October, November and December as the stock position was rather weak there. Demand from West Asian nations and Africa is also picking up thanks to the coming Ramzan season.

Reports from the US and Europe said that importers would be active within a couple of weeks and prices might be pushed up accordingly. Sources said that a few European importers had already started covering black pepper. Brazil has quoted rather higher tags at $3500-3550 for BASTA, fob (Belem).

While India remained on a steady note at $3550 for MG1 (fob-Kochi) for September, October shipment, Vietnam is now quoting $3130 for 500 GL, $3310 for 550 GL and $3600 for ASTA (All fob HCMC). Although overseas enquiries are active for November and December, Indian exporters are reluctant to quote rates because of the uncertainty in the market and a volatile contract market.

Meanwhile, during April-August of current financial year all the three national commodity exchanges had given delivery of 10,026 tonnes of pepper (Ncdex-5676 tonnes, NMCE-4000 tonnes and MCX-350 tonnes) of which a major chunk was exported, mainly to USA.

Vietnam is hitching high hopes on the increased demand from the West Asian and African nations during Ramzan, while domestic seasonal demand and overseas orders are expected to bring in some activity in the Indian pepper market in the coming weeks.

Interestingly, regular supply from producing areas is not seen in the Kochi terminal market in the last couple of weeks which is rather unusual during this season, leading traders said. Normally large volume of pepper will be brought in before the Onam festival season for want of liquid cash.