Pepper prices may fall on early Indonesian supply

The rise in domestic pepper prices in the past two weeks may slow down owing to the earlier-than-expected entry of Indonesian pepper in global markets, dealers said.

Indonesia's pepper crop was expected to be delayed by one month. However, Indonesia has started offering pepper at $1,700-1,750 per tonne from last week, they said.

Indian exporters were expecting Indonesian sellers in global markets only by August as they hoped pepper harvests in Indonesia was delayed by at least one month, a dealer said.

Normally pepper harvests in Indonesia takes place in August, but sellers become active in global markets by May-June.

However, this year Indonesian sellers were nearly absent in global markets in May-June creating an impression of delayed harvest, he added.

Sellers from Indonesia started offering delivery for August and September at $1,700-1,750 per tonne from last week, he said.

At present, domestic pepper costs $1,775-1,800 per tonne.

However, some dealers interpret early offerings from Indonesia as a ploy to test response of global markets.

"A clear picture may emerge only by August first week," a dealer said.

Holidays in the US next two days may also check rise in prices in short-term, said another dealer.

Buyers in the US may become active only by Thursday after Independence Day holiday Tuesday, he added.

Domestic spot pepper had gained more than 4 per cent last week. On Saturday, prices rose to Rs 7,350 per 100 kg from Rs 7,050 on Monday.

Pepper futures also witnessed a similar rise last week.