G.K. Nair

Kochi , Feb. 5

PEPPER prices moved up by Rs 100 a quintal last week from that of the previous week on short supply and good demand.

Spot pepper prices on Saturday were MG1 (garbled) Rs 6,800 a quintal and un-garbled Rs 6,400 as against Rs 6,700 and Rs 6,300 a quintal on January 28. However, the futures prices have shown a decline in IPSTA while in some other exchanges it has gone up.

Even though harvesting has begun, physical pepper selling has been poor. It gives the impression that there is an estimated 30-40 per cent decline in production, Mr Mahendra L. Parekh, President, Indian Pepper and Spice Trade Association (IPSTA), told Business Line.

In addition, because of the good prices of rubber and coffee farmers are holding back pepper, anticipating improvement in prices in the coming weeks, he said.

According to him, Sri Lanka has not much product in their hands to sell now. "They may be having 500-600 tonnes left ." Thus, there is a short supply. The decision of the Kerala State Co-operative Marketing Federation (Marketfed), which has around 2,500 tonnes of the 4,800-tonnes of black pepper it had procured last year, not to sell the stock has also helped to push up the price, he said.

Export demand is weak as the US players are watching for the Vietnam crop to hit the market. "But till March nobody can given them pepper. On the other hand, harvest in Vietnam will be delayed by four to six weeks," he said.

Of late, the trading pattern has changed in the world market, he said. Nobody is interested in keeping big inventories. Besides, they want the Indian prices to match international parity, he pointed out.

Export sources said that Brazil is not offering at all, as it has not much to sell now. Indonesia is not aggressive and offers at $1,600-$1,625 a tonne C&F. Vietnam does not have ASTA grade to sell, as it has been converting black pepper to white. From the new crop in Vietnam, an estimated 25,000 tonnes would be imported by China, directly and indirectly, they said.

Meanwhile, according to the International Pepper Community (IPC), overall production for 2006 is projected to be 2,65,000 tonnes, against the estimated production of 2,94,770 tonnes in 2005. At the same time, recent IPC studies have estimated that the world pepper consumption is growing at 3.46 per cent per annum. "The US remained the single largest importer of pepper with a share of 23 per cent of the world market. US imports have shown an annual growth of 5.46 per cent during the last decade," the study said. However, the annual growth in production is much more.

Given the current trend, market observers here feel that there is a chance for the Indian pepper during February, March and even till mid-April. "Enquiries are floating with India," they said.

According to trading sources, the domestic demand was good but it is met by supplies from the primary markets in Karanataka and Kerala's Wayanad district.

The arrivals have dropped to 5 tonnes a day now as against 15-20 tonnes a day on these days in the previous years. They claimed that the decline in production here might be around 50 per cent.

The growers are not doing selective picking as it turned out to be non-viable due to low yield per plant, they said.

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