Vietnam policy fuels bull run in pepper market

The domestic pepper market is set for another bull run on the back of Vietnam's strategy to hold back black pepper stocks. The south-east Asian country's move is in anticipation of a further rise in prices, especially at the Indian futures counters, because of lower output estimates in major pepper producing countries.

Growers in Vietnam are holding back pepper in anticipation of much higher price levels in the coming months. Interestingly, the price movement in the country is very much in tune with the Indian futures.

Vietnam has hiked the prices on an average by $370 a tonne during the last one week. ASTA Vietnam is quoting at $3890 a tonne, 550 GL at $3500 and 500 GL is ruling at $3300 a tonne.

In Indian markets, prices are hovering around $4,000 and buyers from all over the world have an opportunity to contract quality Malabar pepper at reasonable levels. Leading dealers said exporters in the country were in a position to deliver quantities due to the huge turnover in commodity exchanges. Average turnover in the exchanges is around 60,000 tonne.

According to experts, with Vietnam keeping prices high and carryover stock in major consuming countries fast getting depleted, Indian exporters have the opportunity to call the shots in global pepper market.

Prices in Brazil remain steady around $3200-3275 for 560 GL and $3600-800 for ASTA, while Indonesia is offering somewhat lower quotes with carryover stocks.

Meanwhile, demand seems to be emanating for Vietnam pepper from Pakistan, Middle East and European markets.

But the Indian market movement, based on futures counters, remains the guiding factor for the global pepper market.