Vietnam beats India in pepper mart

Indian black pepper is $345 a tonne higher over last year

Indian black pepper is virtually out of the global market as Vietnam is offering the commodity at much lower prices, though production in the current season is estimated at 90,000 tonne, 15,000 "� 20,000 tonne lower than last year.

According to traders India black pepper is $345 higher on an average per tonne which is a major constraint to the product on the global export front.

FOB rate of Vietnam ASTA grade is $1,380 a tonne, almost at par with last year, but India offers $1,725.

Vietnam also offers 500 gm per litre at $1,220 and 550 gm at $1,280. According to sources in Vietnam there could be a further fall in prices, though marginal, with harvesting reaching its peak by April.

Traders said Vietnam might offer lower price tag throughout the current year since total availability would be 1,00,000 tonne including carry over stock.

Domestic price is also high and traders in north India are not active as spot prices increased to Rs 7,000 "� 7,400 a quintal. Domestic demand will also differ as pepper from Coorg area in Karnataka has hit the market already.

Supply from Coorg will be in full swing by the first week of next month and market experts expect a drop in price by that time. It is estimated that Coorg will have a total production of 15,000 "� 20,000 tonne in this season and total domestic production will be 45,000 "� 50,000 tonne.

Traders indicated much higher import during the current year as Vietnam is a very attractive destination for re-export companies of India.

Vietnam is also very active in the production of white pepper as Indonesia, the main producer, is short on production. During the last year total production in Vietnam was 1,10,000 tonne and the bumper crop made for strong buying in the global market. But the marginal fall in production this year will not affect the price line much as Vietnam offers lower tariffs.

Export traders also told Business Standard that major importing nations like the US and the European countries are not aggressive in buying and ready to wait till the April peak season in Vietnam.

Black pepper spot prices in the domestic market closed at Rs 6,900 "� 7,300 a quintal last week, with a fall expected next month owing to increase in supply.

The estimated loss in production by 35- 40 per cent may favour a bull phase. India will probably not be able to meet the export target of 15,000 tonne fixed by the Spices Board. India exported 13,450 tonne pepper during April "� January 2005-06 and earned an income Rs 113.43 crore.