It's boom time for pepper traders as supply dips

It is boom time for pepper growers and traders. The global price of black pepper on Monday shot up to an all-time high, as Vietnam quoted $7,050 per tonne for the 500 Gl grade, up from its asking price of $5,600 per tonne for the same grade just a month earlier.

The market is buoyant as pepper of all origins is in short supply across the globe. For the time being, only India has a surplus to offload, but domestic demand is also at a peak now, due to the Ramzan season. The Indian price for the Asta grade was $7,500-7,550 a tonne last week itself and seems poised to touch new heights. Jubilant growers and traders are now selling the old stock, as the local price is now above Rs 300 a kg. The local spot market on Monday quoted Rs 305-312 a kg, when it was Rs 280 on July 29. A year earlier, it was Rs 198/kg.

As reported earlier, the global stock had dropped heavily due to selling out of stock in Vietnam and a dip in output in Indonesia. According to reports from Vietnam, the market is poised for a further sharp increase in prices. The current stock there is estimated at 15,000 tonnes, of which 10,000 tonnes is with leading export houses. Due to reports on poor stocks, there is also panic buying by takers, especially from the US and West Asia.

According to Jojan Malayil of Bafna Exports, the global market would be a on a bull orbit till December. That is when the next crop season in India would commence. Earlier, it was estimated that the output from Vietnam would be 15,000-17,000 tonnes. The latest reports from there indicate the production would be no more than 12,000 tonnes. Then, there is the big shortfall in Indonesia. During June-December, regular supply is normally ensured from Indonesia and Brazil. After that, India and Vietnam take the queue.

The price in Brazil has increased to $7,200/tonne, from a recent $6,500 per tonne. The production is estimated at 35,000 tonnes but experts say this would not be released immediately, on account of the strengthening of the market. According to reports, a major chunk of growers there, who are immensely rich, are holding the stock for a further swelling of prices.

The local market is also poised for breaking new heights in price, as the winter seasonal demand is likely to pick up soon.