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Pepper exporters upbeat as global supply shrinks

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George Joseph Kochi
US importers have finally shown interest in the Indian market signalling the beginning of a likely uptrend in black pepper exports.
 
The city-based exporters think some positive factors "� including the global ones "� are helping India become the focal point of global pepper trading for the next six months. Reports of delayed crop and a drop in production from Indonesia and Brazil have placed the country in an advantageous position.
 
Prices in all six futures contracts increased on account of the reports that the arrival of new crop would be delayed in Indonesia by one month. Although traders are divided on the estimated figures of Indonesian production, they all agree that there will be a fall of 25-30 per cent in output from the normal 26,000-27,000 tonne.
 
A trader said as Indonesia is concentrating more on white pepper production, during the next season, its black pepper output would decline to around 12,000 tonne. And, of this, he said, ASTA grade would be below 7,000 tonne.
 
Further, it is rather abnormal that Indonesia has not yet quoted prices for the current month and for the July contracts. Traders say this is mainly because of the fall in production and the delayed crop. Usually, Indonesia starts sales by May, and 50 per cent of the trade is completed by June itself. So, this has given Indian traders a lot of hopes. According to the reports, crop in Brazil may also drop by 5,000-10,000 tonne from its normal level of 35,000 tonne.
 
Meanwhile, over 60 per cent of the total production in Vietnam has been exhausted, with a stock of around 30,000 tonne still remaining. As Vietnam is increasing its quotations on a regular basis, experts feel that the domestic market would be on par with it in a short period. This augurs well for India after a long gap of four-five years. The US importers are actively enquiring for September to December shipments.
 
The crop will hit the markets both in India and Vietnam by next year. In India the new season will start by January while in Vietnam harvesting will start in February.
 
 
 
 

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First Published: Jun 21 2006 | 12:00 AM IST

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