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| Indonesia sets the global pepper mart on fire |
| George Joseph / Kochi Jul 17, 2009, 00:13 IST |
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 Will Indonesia spoil the party in the global black pepper market? The current pricing strategy adopted by the country confirms this anxiety of pepper exporters across the globe, especially from Vietnam.
In the middle of a busy harvesting season, Indonesia has slashed the price to $2,200 a tonne (FoB Pang Jang) for the ASTA grade variety. This is the lowest across all important markets.
This sharp reduction in prices by Indonesian exporters has made buyers from the European Union (EU) and the US temporarily withdraw from the market. This has seriously hurt the prospect of a much-awaited short-term bull phase in the global pepper market.
It is also reported that there will not any shortage of the spice during the July-September period as expected earlier. Indonesia is likely to have 15,000 tonnes of ASTA pepper for exports. The country’s total production is expected to be around 20,000-22,000 tonnes. Harvesting in Brazil will begin next month and production is expected around 30,000-35,000 tonnes. The total global availability of the spice is likely to be 85,000-90,000 tonnes till December, which includes 35,000 tonnes of carry-over stock in Vietnam.
The stock position was comfortable to tide over the low pepper production, said Kochi-based pepper exporters.
Vietnam has also slashed the price for ASTA to $2,400 (FoB-HCMC) while Brazil is offering fresh harvest at $2,350 (FoB-Belem). The Indian price tag of $2,650 is much higher than these.
Most traditional buyers, such as the US, prefer to buy from Indonesia, the cheapest destination currently. According to latest US data, the country had bought 4,364 tonnes pepper in May this year. Of this, 2,315 tonnes were imported from Indonesia while Vietnam supplied 850 tonnes.
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