Kochi: Pepper prices are under pressure and likely to decline as Vietnam lowers its rates. International and domestic prices of pepper had surged to record highs on report of global shortage of the commodity and good demand. After remaining low for most part of October, Vietnam was seen offering pepper below Indian rates on Monday and Tuesday. Traders and analyst estimate the market to ease on fresh reports that Vietnam may be holding sufficient stock till the new crop comes in good volumes post January.
Jojan Malayil of Kochi based Bafna Enterprises estimates the market to ease with most of the buyers covered for the short term.
According to industry experts, buyers in Europe, Japan and Australia do major portion of their buying for the next season during September –October. US buyers also stock in advance for the coming Christmas and other festivals. “Reports suggest that Vietnam has more than 6,000 –12,000 tonne of pepper. Some of them may be already contracted for delivery but then there is some pepper till the new crop comes,” Jojan said. The Vietnam crop is expected to come to the market by February and the trade puts the crop size around 1,35,000-1,40,000 tonne, he added.
The Indian crop is estimated to trickle in from December end and gain momentum in January. ‘The trade estimates the Indian crop around 40,000, 42,000 tonne,” he said. The weakening of Indian Rupee with respect to dollar incentives exports and discourages import.
“There is plenty of floating pepper in the market and it is surprising. Some validity expired pepper from the exchanges are there, and there are some traders who are finding holding pepper costly at the given prices,” P Nandakumar, a trade consultant from Kochi said.