Black pepper prices to rise by third quarter

Vietnam exports to exhaust completely by October

The price of black pepper would appreciate globally, by the third quarter of the current financial year, say experts.

A 20-member trade delegation from Vietnam, the world's largest producer of black pepper, said the US-based Indian traders Vietnam had shipped 33,000 tonne till April 30 and there would be more exports, to the tune of 10,000 tonne every month till the end of October.

Total exportable surplus in the current year will be around 1,00,000 tonne including a carryover stock of 10,000 tonne. As per this view, the Vietnam market will be empty by October, and the next harvesting season will begin only by January 2007 and will be active in February. So, experts feel that there would be a temporary supply crunch in the international markets, possibly triggering a price rise.

As Vietnam is offering the most attractive prices currently, the global export market will be under its control till October. The country now offers ASTA grade pepper at a price of $1,340 a tonne, compared with much higher price tags of India at $1,675 and Brazil at $1,450. Vietnam also offers 550 gm/litre at $1,250 and 500 gm/litre at $1,200.

Market sources said US importers would consider India only after pepper from Vietnam has completely flashed out, by October. So, there are chances that Indian black pepper go places by Q3 of the current financial year, and also, the price would rise accordingly, experts felt.

Other major producing countries like Indonesia and Malaysia are not active in the international market and dominance of Vietnam is so obvious that a majority of importing nations are dependent on its market.

Export traders said the price line would be almost steady in the next few months as Vietnam exporters do not expect a price war. The US had imported 12,325 tonne pepper during the January-April period, up from 10,810 tonne in the same period last year. In March alone, when harvesting was at its peak in Vietnam, the US bought 4,320 tonne. As for white pepper, during the January-April period, the US had imported 1,568 tonne.

Meanwhile, pepper from the Coorg area in Karnataka is now dominating the domestic market, as harvesting there is at its fag end.

Total production is estimated to be 20,000 tonne, with the domestic demand being at a low level now. Traders said the demand for the Kerala pepper from north India is rather low as the market has already over-appreciated, according to traders of upcountry markets.