US demand likely to spur pepper mart

The global pepper mart is poised for a bull run on expected spurt in demand from the US. The stock position in the US, the world's largest importer of pepper, is currently very low as buyers in the US were not active in the global market from September 2007.

But with pepper stocks falling, renewed interest to enhance the inventory level in the US during the harvest season in India and Vietnam could propel a bull run in the pepper mart.

The current slowdown in the US economy will play a very crucial role in the buying strategy, and many experts feel that the US could keep imports at the minimum level thanks to various factors including economic recession.

Vietnam has increased the price tags anticipating good demand from the US. It could follow the strategy of deferred selling which they adopted during the 2007 season.

The country has quoted $3,350 per tonne for 500 gm/litre, $3,550 for 550 gm/litre and $3,800 for ASTA grade. Harvesting is, currently, in full swing in that country and, according to the latest estimate, the total production is expected to be 110,000 tonnes.

The current Indian price tag for MG1 grade, for which overseas demand is low, is $3,875-3,900. Brazil has a price tag of $3,600 and Indonesia $3700-3,750 for the same grade.

Leading exporters told Business Standard that Europe and West Asia were showing interest in FAQ grades but not for MG1.

Meanwhile, harvesting is very active in Kerala and the market is seeing an average daily arrival of 6,070 tonnes. Harvesting in Karnataka will begin next month and the stakeholders are betting on strong overseas demand in the coming weeks.