Global black pepper prices rose sharply in the past week due to speculative trading in the futures market. The rise in India tempted other countries like Indonesia and Vietnam to raise prices this week by $100 a tonne. But, according to market experts, the global mart is poised for a fall in prices next month onwards, thanks to poor offtake from the euro zone and the expected bumper crop in Indonesia and Sri Lanka.
According to a leading dealer here, European buyers are awaiting the new crop from Indonesia. The current upward price movement is based purely on speculation.
India raised its overseas tag to $7,400 a tonne, while Vietnam and Indonesia offer $6,900 and Brazil offers $6,750-6,800 a tonne. According to reports from Indonesia, output this season would be higher at 30,000-35,000 tonnes. The normal crop size is 22,000-25,000 tonnes.
Likewise, Sri Lanka will also have a bumper crop of 15,000 tonnes, keeping the global supply of pepper in the latter half of this year intact. Sri Lanka offers high quality pepper at $6,500 a tonne. So, a majority of buyers from Europe are waiting for the season in Indonesia and Sri Lanka to end.
Leading exporters said there is good resistance from importers, especially from the euro zone, due to the continuing economic turmoil. Importers are postponing buying and are awaiting a fall in prices. Demand from West Asia is also low, as they had bought substantial quantities during January-March.
According to reports, Vietnam still has a stock of around 70,000 tonnes and there is no reason for any supply shortage.