Black pepper export from India may come to a halt as the trade is currently running practically out of stock. Since the stock has been lowered hardly to 6,000 tonne, including 3,000 tonne in warehouses exporters are in a bee line to fetch maximum quantity in order to meet overseas commitments. Although the domestic pepper mart is running out of stock a bearish mode encircling the trade because of low overseas demand coupled with a strong bear outlook in futures trading.
What Kochi bound exporters felt that India would not practically sell pepper after December as stock might be almost nil by then. There is ‘critical minimum’ stock in the market and this can only meet the combined overseas and Indian demand for the next couple of months. Normally the crop season in India begins by December, but this time it will be delayed by at least 3-4 weeks. This is because of the adverse climatic condition in the plantation areas of Kerala and Tamilnadu and 40 per cent drop in production is projected in the coming season. Only Karnataka can supply the usual volume of pepper this time and a section of the exporters feel that Karnataka would grab the no.1 spot in production this time surpassing, Kerala, the traditional largest supplier of the black gold.
Growers of Idukki and Wynad district said Business Standard that the crop would be one of the lowest during a decade as untimely rainfall destroyed the first round of flowering of vines. The harvesting will pick up only by January and a continuous flow to markets is expected by then only.
A top exporter said that the US importers were keen on placing orders beginning from January since they were safely covered for the next two months. It is right time for importers to step in and buy pepper as the prices across all the producing nations except Indonesia is on a recent low. The Indian price tag for MG1 had been dropped to $ 2400 a tonne, raised later to $ 2550. Vietnam offers $ 2700 and though not actively trading Brazil quotes $ 2400. $3100 -3200 is the latest price tag of Indonesia [fob- Panjang] though there are not much overseas buyers.
The funny fact about pepper mart is that the market is in a bear orbit even when the supply side is r very weak for the last 4-5 weeks. The only factor bewildering the market is the global economic turmoil that is expected to badly affect the consumption of spices in US and European economies. Black pepper is the most affected item as its export had been dropped by 33 per cent during April – September at 12,750 tonne against 19,165 tonne in the same period of last year. The export earnings dropped to Rs 215.70 crore from Rs 279.15 crore, registering a fall of 23 per cent.