Indian pepper players smile: Vietnam runs for cover
With tight supply situation in Vietnam, the ASTA-grade pepper of 550 gl is now quoting $4,100 per tonne and that of 500 gl variety at $3,900 a tonne. In comparison, the price of the best quality Indian pepper of Malabar grade-1 is hovering around ...
By Ratna Ganguli, TNN |
KOLKATA: After a brief silence on export queries for black pepper, pepper exporters from India are actively responding to the queries. No doubt, stimuli come from two factors — softening of the spice prices in futures market at the domestic commodity bourses and melt-down in Indian pepper prices in the global market vis-a-vis its closest competitor — Vietnam.
With tight supply situation in Vietnam, the ASTA-grade pepper of 550 gl, originating from that country, is now quoting $4,100 per tonne and that of 500 gl variety at $3,900 a tonne. In comparison, the price of the best quality Indian pepper of Malabar grade-1 is hovering around $3,925- 3,975 per tonne.
Cashing in on the firm trend in Vietnamese pepper in the world market, Indian exporters are now flooded with export enquiries, bulk of which are pouring in from Russia, Germany, the US and Canada. Due to renewed interest in Indian pepper, around 1,500-2,000 tonnes of pepper have been contracted over the past week for shipment in June-July to those countries, sources in the exporting community said.
Indian pepper’s price competitiveness is further enhanced with the weakening of pepper futures prices in the domestic commodity exchanges. Hit by a 4-5% hike in margins on pepper futures, which came into effect from the third week of April, futures prices for June delivery dropped to Rs 16,215 from 16,599 per quintal in the past week at National Commodity and Derivatives Exchange (NCDEX).
Market sources said pepper futures prices are expected to further come down as exchanges are under pressure to reduce their stockholding.
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Vietnamese pepper which remained cheaper than Indian variety over the past few years is now selling at a premium because farmers and traders of the country have also become aware about the pecuniary gains in stockholding, particularly at this juncture when pepper production in the country are slated to fall by 15-20% in the current year. Market sources said stockholding of pepper has become such a lucrative business in Vietnam, that bankers of the country have now come forward to provide finance for buying and stocking of the spice. Expecting further appreciation in home-grown pepper prices, the spice dealers in Vietnam are hoping to generate export revenue of $300 million in 2007 against $197 million last year.
According to the International Pepper Community (IPC), tight supply situation will prevail in the global pepper market throughout 2007. This is because demand for pepper is expected to rise by 3.5% against a 20-23% fall in global production, mainly in Vietnam.
Due to this, total exports of pepper at the global level is expected to drop to 175,000 tonnes in 2007 against the last year’s export of 190,000 tonnes.
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Vietnam pepper of 550 gl is now quoting $4,100 per tonne as against India’s Malabar grade-1’s $3,975. Exporters are now flooded with enquiries from Russia, Germany, the US and Canada Tight supply situation is likely keep pressure on global pepper market throughout 2007 Demand is expected to rise by 3.5% against a 20-23% fall in global productionToo busy to trade in stocks? Invest in Mutual Funds with ET Money!
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