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| Pepper prices up on low availability
A sharp fall in stocks across all leading producing countries has strengthened the bull phase in the international pepper market. Reports emerging from major producing countries puts the total global stock at around 45,000-46,000 tonnes. According to experts, the November to January period is going to be crucial for pepper trade.
Leading consuming countries in Europe and the US need around 15,000 tonnes of pepper on a monthly basis. So the demand-supply dynamics is further providing impetus to the current bull run, which is likely to stay for the next 10-12 weeks. The supply situation is likely to brighten from February, when harvesting begins in Vietnam.
The current tight supply situation has pushed up prices across all major origins of the spice. Prices of all major origins, except Brazil, are now above $3,000 a tonne with Indian prices topping the $3,350 level (freight on board-Kochi). Even this price is attracting US re-sellers due to low global stock availability.
Though the Indian MG1 ASTA tag is higher, importers in the US are willing to offer a premium for the sterilised pepper available here because the sterilisation cost in the US is very high and both Indonesia and Brazil do not have such facilities. Vietnam increased price to $3,100-3,200 (fob-HCMC), while Indonesia quoted $3,075 (fob-Panjang) for the ASTA varieties. Brazil currently offers ASTA grade pepper at $2,900 (fob-Belem).
Vietnam, the world’s largest pepper producer, is currently having a stock of around 15,000 tonnes. Brazil’s export during April-September was 9,000 tonnes. According to the available information, Brazil will be able to export 18,000 tonnes with an export commitment till March 2010. India have a stock of 8,000 tonnes, including 4,400 tonnes of valid stock available with commodity exchanges. Indonesia also have a stock of around 5,000 tonnes.
The fresh Indian crop is expected to hit the market by mid-December.
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