Acute shortage of black pepper is still prevailing in the global market, paving way for a further rise in prices in the short run. Global supply is expected to be stable by the end of February or the beginning of March, when fresh crop from Vietnam comes to the market.
Global demand is also on a low ebb currently, as most importing countries are awaiting fresh crop from India and Vietnam. So, the global pepper mart is rather in a holiday mood for a while and the Christmas-New Year season supports this.
According to leading processors in Vietnam, the stock in the country is very meagre and export is too low since the last five-six weeks. In November, Vietnam exported just 2,200 tonnes, owing to weak stocks, especially in the case of black pepper.
Most processing units are now closed for want of pepper. It is a similar case in the export sector also. The indicative prices there are $7,000 a tonne for 500 GL grade and $7,400 for 550 GL. The price of white pepper increased to $10,000-10,100 a tonne in Indonesia and Vietnam, due to low stocks.
The global trade is presently on a decline as only Brazil and India offer the spice. For Asta grade, India offers $7,350-7,400 a tonne, while Brazil quotes $7,100 a tonne. India is having a stock of roughly 4,000 tonnes, while Brazil has 12,000 tonnes. The market has to wait for two more months for the arrival of next season’s crop and there may be an increase in prices meanwhile.
A majority of importers in the Europe and the US are now awaiting the fresh harvesting season.
Prices are likely to fall as and when the new crop hits the market. In the next season, Vietnam is expected to have around 140,000 tonnes, but the total global supply is likely to be steady in 2012. So, a free fall in prices can be ruled out even during the middle of the crop season.
In India, pepper from the southern parts of Kerala will come to the terminal market by the end of this month. A paradigm shift in supply can only be expected by March, when harvesting in Vietnam will be at its peak.
