Prices of pepper are likely to appreciate globally in the second half this year due to shortage of stock. Taking cue from this, all major producing countries including Vietnam and Indonesia are quoting higher prices.

Vietnam hiked the tag for ASTA grade variety to $2,150 a tonne (FoB- HCMC) while Indonesian offer is at $2,350 (FoB-Panjang). Though Brazil is running out of stock, their price indication is $2,200 a tonne. The pricing strategy of both, Vietnam and Indonesia, is according to the movement of the commodity at the Indian futures trading counters and the current increase can clearly be translated into a much stronger global market.

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A major chunk of the stock has been sold out in Indonesia also. Reports say that Vietnam would be shipping 60,000 tonnes by the end of this month and steady domestic demand rules out much bigger exports from India. So there are strong fundamentals existing in the global mart that paint a different picture in June-December period.

As usual, India quotes the highest price of $2,750 a tonne in the international market. A steady local demand, coupled with hectic speculation in futures trading, keep the Indian market high. The domestic demand is expected to rise in the coming months due to a shift in climatic conditions which has kept tags at higher levels.

Meanwhile, import of pepper is on an increase and according to leading traders, by June, the shipment to India would be around 3,000 tonnes by value-added processors. According to a leading exporter, imported stuff meant for value addition and re-export, is being diverted to the local market.

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