Pepper prices set to fall globally

International pepper prices are expected to fall sharply as Vietnam is selling its current stock at a fast pace in anticipation of a good crop next season.

Though pepper from major growers can be bought at less than $3,000 a tonne at present, India is selling at $3,150 a tonne. This is mainly due to the appreciation of the rupee. But the overbought position in the futures market is causing the local market to follow the global suit.

Vietnam is offering the ASTA variety at $2,950 while both Indonesia and Brazil are offering it for $2,850 a tonne. So, India stands nowhere in the global pepper mart and is importing heavily. Vietnam is expected to clear the backlog (approximately 20,000 tonnes) within the next eight weeks, thus pushing down prices. It will be very tough to sell in November and December as both Europe and the US will be closed fully for Christmas and New Year.

So, both Vietnam and Indonesia are clearing their stocks aggressively. US buyers are now active for the next year, especially for the first quarter of 2010 as they expect appreciation in prices. Some of them even bought around 1,000 tonnes of pepper at $3,100 a tonne. The global market may have little stocks by the end of this year due to selling by Vietnam and Indonesia. So, the US importers are keen on buying for the next year.