STRONG DOMESTIC DEMAND, TIGHT SUPPLY POSITION KEEPS INDIAN READY PEPPER MKT HOT

STRONG DOMESTIC DEMAND, TIGHT SUPPLY POSITION KEEPS INDIAN READY PEPPER MKT HOT
2009/06/01


G K Nair
Kochi, May 31
Strong domestic demand and tight supply position is keeping the spot black pepper prices in India above the June delivery prices of the
exchanges.
Spot price of MG1 was at Rs12,600 a quintal (100 -kg) at the weekend close on Saturday where as the June delivery price at the weekend close was Rs12,320 a quintal.
Availability is said to be very thin.
Domestic buyers from north Indian markets were meeting their requirements by direct purchases from the Coorg Region of Karnataka state where from the material is moved out at Rs125 -127 a Kg to anywhere in India. Similarly, the dealers in Tamil Nadu state was buying from Kerala's Idukki region.
Sharp fall in output in 2008 crop and great domestic demand outweighing the indigenous output would pave the way for increased imports in the coming months as the prices in other origins continued to remain far below than that of the Indian parity. Growers fear that black pepper imported under advance licence for value addition and re-export might enter the domestic market to depress the internal
Meanwhile, Indian futures market during the week witnessed high volatility mainly due to manipulations by the operators who have been pushing up and pulling down the prices under the guise of speculation. Consequently, in fact, the market is shrouded by uncertainty. “In fact, the prices were oscillating up and down without any rime or reason and also without any o-relation to the fundamentals, trading sources told Brazilian Pepper Trade Board. “It is not at all a healthy sign. Real hedgers, be it exporter or domestic dealer, will move out from the market. Similarly, small and medium players are also compelled to go out. Investors are also not coming forward as there is no spot pepper”, they said. “If gambling and manipulation just to make money by a section under the guise of speculation is allowed then futures trading will have no meaning and it will work against the purpose for which it has been introduced”, they pointed out.
All the contracts on the main exchange dropped during the week.
The fall was from Rs264 to Rs342 a quintal at the week end close. June delivery closeted at 12,320 on Saturday.Spot prices also fell by Rs200 a quintal during the week to close at
Rs12,100 (un-garbled) and Rs12,600 (MG 1) a quintal.

INT´L MARKET
Indian parity at the international market ruled above all other origins at $2,650 a tonne (c&f).
Prices of various origins quoted c&f New York in US $ per tonne were MG1 Asta -$2,700-$2,775; Lampong Asta - $2,450; Vietnam Asta -$2,375-$2,400; Brazil Asta - $2,350 fob (nominal parity)
Vietnam white pepper was offered at $3,300-$3,350 and Muntok white pepper at $4,050-4,100 a tonne (c&f).

IPC REPORT
According to the International Pepper Community (IPC) the black pepper market watched on the development in Vietnam as material from this year's crop has entered the market.Local prices at HCMC were down marginally, but fob prices were stable at $1,875 a tonne for 500 GL and $1,990 a tonne for 550 GL. In Lampung, Sarawak and Sri Lanka,
prices were reported up.

WHITE PEPPER
In Bangka, local price eased marginally, by 1 per cent to IDR 36,250 a kg. In Sarawak, prices were up by 2 per cent both for local and fob.
In Vietnam, prices of white pepper were reported stable.

The Crisis & The Pepper

This has been a tough year for the Pepper market operators.
After early rise in prices, peaking in February, market started its descence in a setady and solid path which culminated in October whith the world crisis and the Dolar volatility.
Commodities suffered too and the crisis is said to be the worst since the 29 bankruptcy.
However some points deserve a more detailed consideration.
This crisis is essentialy a monetary crisis - lack of moneys. But what moneys ? The fake ones - virtual moneys that did not exist - actualy never existed. Just promises of payment.
There´s a need to separate the physical from the virtual. Sure, jobs and salaries will be lost and the consumption will be reduced to a degree. The consumption of luxury articles will suffer as well as housing, cars, and other big value items. But we do not see the food industry or pharmaceutical, or any other for primary needs to suffer in the same extent as the rest. People will still eat - even because it´s the cheapest expense. To put all the produce in the same basket is an error or can one imagine the guns industry reducing prices due to lack of demand?
There´s life beyond futures trading...
The problem is that such catarse open doors to speculators to manipulate the markets.

Shortage of Pepper in India

DEAR SIR, WE ARE THE LEADING EXPORTER IN INDIA.........MY NAME IS BASKER.

IN INDIA AT TODAY POSITION,THERE IS NO STOCK OF PEPPER...

IN FUTURE THERE IS THE TOTAL CROP NEARLY 35000 TONNES,DECRESE BY 35%.....

SO MY VIEW IS THE ,PEPPER RATE WILL BE 4000$ VERY SHORTLY..........
THANK YOU.......
IF YOU HAVE ANY VIEW IN PEPPER SEND ME SIR................

Indian and the International Pepper market

Dear Sir,
Kindly find below our take on the Indian and the International Pepper market.

Black Pepper Market Report;

The Indian Pepper Exchange has been the principle reason for the markets coming down from levels of 4000 USD/MT to levels of 2600 USD/MT FOB for MG1 ASTA. Between the price movements is a whole story waiting to be told.
The Indian exchange is charateristic of such price movements, even from before. But, the reason behind the current drop, non withstanding, the future outlook is still important and worthy of consideration.

The Indian markets have come down during the months of September, Oct, Nov. These months are also periods of short arrivals in the markets as the season is over and physical availability is close to non existant. This non availability automatically forces the markets, sellers and buyers alike to take long positions in the exchange market for their physical commitments. The exchanges, most of them having their own insider trading, use this opportunity to make quick bucks, by bringing the market down.

The exporter community in India is a small community. The whole of the Indian exporting community at any point of time, is capable of holding sales of about 8000 Tons. The stocks in the exchange are available in a monthly once delivery period interval. It is a surprise that the stocks held in the exchange for deliveries for the next 6 months are lessor than 2800 Tons.

http://www.ncdex.com/Downloads/ClearingServices/52%c2%a7142%c2%a7comm_mis_03112008_FED.pdf

This means with the exporters overcommitting by thousands of tons every month, there are likely to be defaults in the months to come if markets stays at current levels. There are no physical arrivals in the market from farm gate level. The monthly requirement of about 3000 tons in this dull market, being the domestic demand is being catered to by the stock holders. At the current trend and at the rate at which stocks are being depleted, we are very firmly of the opinion that the markets will soon run out of physical stocks for the domestic market. What about export commitments. We know that domestic business running into defaults is not a new thing to happen.
But, the Indian exporter community has never defaulted in the International market. Serious shippers will have to ship at any price. The exchange can default by paying a penalty of 3%. This is where, the exporting community is staking in the Indian exchange.

It is important to note, the current stock levels in India.
We estimate it as below;
Domestic sale centres- 750 Tons.
Origins- 2000 TonsPepper Exchange - 2800 Tons
Iron Stocks, Dealers, Traders etc- 2500 Tons
Total Stocks - 8050 Tons

Indian consumption for the months of November and December- 6000 Tons.
Exporters commitment for this period- 4000 Tons.
Exporters commitment for Jan- July - 4000 Tons.

The whole market has been wrestled down, considering technical charts. The markets have been brought down at a period when the USD has been appreciating against the Ruppee. But the Indian markets have also fallen considerably in Ruppee terms. Dollar is today fetching 48 Rs while 4 months back, it was fething 40 Rs. This has in fact even more exxagerated the fall.

The Indian new Crop; The Indian Season might be delayed this year, upto February. We have seen last year, that the Indian new crop started tricking in only by the beginning of February. This year too due to delayed monsoons, we might see such a trend. The Indian new crop, promises to be phenomenally low sized crop. Due to never seen before weather patterns, Indian pepper crop is probably down by a half from the worlds favorite origin.

Last years crop was estimated thus;
Kerala; 26000 Tons
Karanataka; 13000 tons
Tamil Nadu; 4000 tons
Rest of India; 2000 Tons

The Indian weather played havoc with drought conditions prevailing upto July, three months down the Rainy season. Below are links that will clearly depict these matters to highlight the weather conditions in Malabar region.

http://www.thehindubusinessline.com/2004/03/03/stories/2004030300591300.htm

http://www.thehindubusinessline.com/2004/03/04/stories/2004030401221700.htm

http://www.thaindian.com/newsportal/business/kerala-set-to-face-water-shortage-due-to-poor-monsoon_10068608.html

http://www.thaindian.com/newsportal/enviornment/water-water-everywhere-in-kerala-but-very-little-to-drink_10070910.html

Black Pepper is a water pollinated crop. With lack of rains in the growing areas right upto the end of July, and then rains that followed, which started as though the dams of heaven were opened up has lead to large scale destruction of agricultural produce in general, and to pepper, it has created havoc. Karanataka, which is beigbouring Kerala, has been declared a drought area too. Tamil Nadu also has been declared a drought Area by the National Commission.

News artilces declaring Tamil Nadu as drought hit

http://www.hinduonnet.com/fline/fl2106/stories/20040326003103500.htm

http://www.hinduonnet.com/2001/08/05/stories/0505134d.htmhttp://desertification.wordpress.com/2008/07/08/tamil-nadu-should-prepare-for-drought-report-google-business-standard/

News articles declaring Karantaka as drought hit

http://www.hindu.com/2008/08/23/stories/2008082354870600.htm

http://www.hindu.com/2008/10/19/stories/2008101950870300.htm

The Indian pepper crop of Kerala and its neighbouring karantaka and Tamil nadu stand estimated as below;
Kerala; 15000 Tons
Karnataka; 14000 Tons
Tamil Nadu; 2000 Tons
Rest of India; 2000 Tons
Total 33000 Tons.

We are preparing and sending this report hoping that this will help you decide if India, should be the reason that the world market be held down. In India, the exporting community fears that selling overseas will mean, that they will have to prepare for the worst in the time to come. With the new crop starting in February, and buffer stocks down to super critical levels, India is a dangerous market.

India has never had as low buffer as it is carrying now. At any point of time, over the last 6 years, India has carried stocks between 60000 tons - 25000 tons. This is perhaps the first time in recent history that India is carrying lessor than 10000 tons of stocks, and even that is sold overseas by way of contracts.

We feel that like all technicals, this would bounce back up with the same momentum. Kindly be guided by reason while making decisions and not purely sentiment. We have seen the best of buyers miss the best of opportunities, as they fall in fear.

Regards
Rawther

Ncdex - Gamblers safehaven and exporters nightmare

Ncdex(National Commodities derivatives Exchange) Gamblers safehaven and exporters nightmare
Jojan malayil

If you ask me the most dangerous thing you do in the national commodity exchange i will say trading in Ncdex who handles most of the agri commodities futures . The organisation is run by certain numbheaded ex bank officials and new generation MBA!s who has absolutely no knowldge about what you call as domain knowledge.The whole organisation is in the hands of just 10 financially sound broking companies who twists and make the byelaws of the exchange according to thier books , whims and fancies and controls 90% of the volume of the exchange.There is no control over the individual operations of certain members but strictures are put on genuine broking members who follows the norms and never cross the limits.These people operate against all fundamentals of the market and certain times corners a certain commodity because of their muscle and money power.

Just to naarate a very recent incident which happened to us in the recently concluded april 2008 chillies contract 2008 april.We were long and opted for delivery of our 100 mt due to our unfulfilled overseas obligations and the prices offerd to us by ncdex qualty delivered to accredited warehouses of ncdex was much higher than what was traded in the exchange . On the closing day of contract the market hit 2 uppercircuits as sellers were trying to opt out for deliveries as open market prices were much higher.Ncdex came out with a settlement price which they claim they have pooled through their accredited spot monitoring agency Rs 3 lower and settled the contract defaulting delivery anf giving us 21 paise per kilo.We just cant understand the logic of not being allowed the M2 M for us and if a Gambler who would have sold without stocks in the last miniute after paying 2.5% penalities would have walked away 2ith Rs 1.90/- kg and a genuine exporter who would have taken a position in the last day for his unfulfilled overseas obligation would have paid from his pocket Rs 3.05/-kg .

As an exporter who has been hedging overseas commitments in regional exchanges without any problems in the past 28 years is now hit severely both mentally and financially with the lack of domain knowledge of National Commodities and Derivatives Exchange (NCdex) and would warn exporters to keep away from this exchange for their own safety and should promote other exchanges where compulory delivery is compulsory in the liereal meaning of the word and they have systems in place to check so the genuine hedgers are protected.Also would appeal overseas traders who are following the movements in Ncdex pepper and not to waste their time and dont get cheated with the irrevalent quotes which comes which has no relation with the spot market in India.

Indonesian demand sparks hike in cloves

The Public Ledger

Monday January 14 2008


INTERNATIONAL cloves prices have shown sharp increases over these early stages of the new year, fuelled largely by strong domestic demand in Indonesia and heightened speculation.

In the week ending January 11, European traders quoted Indonesian cloves at $6,200 a tonne c&f Singapore, compared with $4,100 a tonne in the week ending December 21. Over the same period Madagascan cloves were said to have reached $5,000 a tonne cif against $4,450 a tonne previously.

One Bangalore trader told The Public Ledger that Indonesia's major cigarette companies Gudang Garam and Samporena were purchasing cloves at higher market prices in order to cover local demand. Also, according to the same trader, local prices in Indonesia were as high as Rp60,000 per kg, equating to $6,200 a tonne fob Surbaya. Moreover, the trader added that his company had purchased Indonesian cloves at $5,700 to $5,800 a tonne in the last few days.

The Bangalore trader viewed Madagascan cloves as being quoted higher than the indications from European traders, citing instances of offers at $5,500 a tonne fob Tamatave.

Emmanuel Nee of French trader Sivanil agreed that strong domestic buying by Indonesian cigarette companies was pushing up prices. In addition, some Indonesian speculators were sitting on stocks. "Each time they receive a single demand they push the price up by $100 [a tonne], " he said. The weakness of the US dollar was also lending support to prices.

Mr Nee explained that the week to January 11 had been paticularly active, helping to push prices up to the latest highs and attain the peaks that Indian traders had projected.

"Although they (Indian traders) have not been exaggerating the trend, they were very early in their predictions, "Mr Nee observed. "Today they are not really buying at this level but they want to tell everyone the market is moving up and will keep on doing so because this will help the domestic market to awaken. Indian buyers are enquiring a lot, asking for small shipments here and there, but they are not buying huge quantities at this level." In addition, Mr Nee claimed that those who use cloves for cooking applications tend to limit their offtake when prices are high.Moreover, he viewed the latest surge in prices as driven solely by speculation. "The speculation is done on the fact that Indonesia has been buying a lot so the available stocks in Indonesia are not a lot and the next crop will not be as good as they expect. If that is the case Indonesia will come to the market and buy again, " Mr Nee said.

Moreover, if the forthcoming Indonesian crop turns out to be very small, then domestic and world prices could see some further short-term increases, he noted.

Mr Nee commented further that Singapore traders were making only tentative offers but no actual deals were being made. "In the meantime, Madagascar shippers are not offering anything and Comoros is empty in cloves, " he said.

Claude Cuvillier of the French broker of the same name remarked: "It is difficult to find sellers in Madagascar."

Cloves’ prices rise 25% as arrivals fall in Brazil

G.K. Nair
Kochi, Jan. 11 Export prices of cloves in Brazil have soared by 25 per cent this week following decline in arrivals at the market there.
Latest reports, according to information made available to Business Line by the Brazilian Pepper Trade Board (BPTB), which trades in spices, “the harvest is smaller than originally previewed – between 4,000-5,000 tonnes. We believe that bids below $4,700 would not be considered at this moment”.
New crop of cloves is slowly coming to the market. Slow drying process in Brazil is also contributing to the thin arrivals, it said.Bullish sentiment
The first week of the year showed a strong bullish sentiment among the growers despite buyers’ (exporters) absence due to holidays. As a result, export prices jumped to $4,800 and further to $4,990 a tonne, which is an increase of 25 per cent compared to one week before, it said.
According to earlier reports, the global output of cloves is estimated to be lower this year following drop in production in several producing countries.
The output in Sri Lanka where harvesting is to take place this month is estimated to be around 2,000 tonnes as against the earlier projection of 5,000 to 6,000 tonne.
Similarly, in Madagascar also it is estimated to be between 1,500 tonnes and 2,000 tonnes as against its normal production of 12,000 tonnes. In Zanzibar it is estimated to be 800 tonnes where the normal output used to be 4,000 tonnes.
The prices quoted here is $5,400 a tonne. Comoros is reported to have produced only an estimated 600 to 700 tonnes and the entire quantity has been sold out.Indonesian output
In Indonesia, the world’s largest producer of cloves, where harvesting is in March/April, the total production is estimated to be around 20,000 tonnes, which is 20 per cent of its total output.
Indonesia had a bumper crop with a total production of around 80,000 tonnes. The price quoted at present is $4,900 a tonne. Indonesia which uses a substantial quantity of its cloves in the tobacco industry is unlikely to have much for exports, a Bangalore-based cloves dealer told Business Line.
India is a major consumer of cloves with an annual demand of 6,000 to 8,000 tonnes. The indigenous production is estimated at below 2,000 tonnes. The gap in demand and supply is met by imports. The total import of cloves during April – October 2007-08 stood at 3,610 tonnes valued at Rs 44.33 crore against 2,881 tonnes valued at Rs 53.97 crore in the corresponding period of last fiscal. The unit value during the first seven months of the current fiscal was at Rs 122.80 a kg compared to Rs187.35 in the same period in 2006-07.
From The Hindu Business Line...

BLACK PEPPER STARWAR

This e-mail was received and distributed by ABEP - Brazilian Pepper Exporters Association and shows how the Black Pepper market strugle - The Bulls X The Bears...
----------------------
Dear Nagano San,

I would like to make a clarifications that Indonesian market never been weak in term of locall price. The price down from 4300 to 4100 only because of indonesian currency is weak again usd . In fact locall market price is very steady and strong eventhough the crop is starting coming in. Parity fob still in level usd 4100/mt without profit. Therefore Indonesian exporter must sell above this level in order to get some profit. Furthermore i never saw and heard in Usa market or Europe market Indonesian exporters being agressive to make an offer or try to sell cheap. Indonesian exporters until today dd.2 August very quiet and silent in the usa and europe market. No body really want to do anything due to steady locall market. I am sure the informations that has been spread in Brasil about the weak of Indonesia prices definatelly to mislead market price and in order to press the market in Brasil and this is the only ways to get the brasilian exporters nervous and willing to sell cheap price and foward shipment. Specailly when exporters and other who does not understand the real market situations for supply and demand will be nervous regarding the mislead market informationsof other origin down from whoever has intentions and interest to buy cheap.
For your knowledge right now many peoples use Indian futures market price to attack Indonesian exporters and try to get Indonesian exporters willing to sell cheap and follow the futures market in India. But unfortunatelly it does not work because Indonesian exporters fully awares of this tricks and we are fully awares that export out of India and import out of india since jan -june are still much more import than what they export. This export include the finish product such as oleoresin and ground products. And we fully understand that futures market in India only for peoples want to gamble in the paper . If we are talking Mg1 and try to buy real black pepper from local collector and farmers, definatelly we can not buy any black pepper because their local makret price much higher than exchange price.
If one day there are crazy people who has money and want to gamble and buy alot in futures exchange in India for nearby and later positions and keep holding the positions. I am sure that futures exchange in India will be cheos and price in the exchange will be up to the roof.
Hope this explanations can help you to explained to your exporters freinds in Brasil.
Finally the most important origin must understand the momentum of the pepper prices must be back to basic supply and demand. When the supply is much less than demand we must see the price must go up. Everybody can not run away from these facts.

Rgds
Yuli

Pepper Exports from India

KOCHI – Bafana Enterprises, a Kochi-based spices processing and export firm, received highest amount of 15 mln rupees under the rupees 7 per 1 kg pepper export subsidy scheme during 2006-07 (Apr-Mar), by shipping 3,350 tn of Indian pepper.
Commerce ministry has provided 7 rupees per 1 kg as freight subsidy to boost pepper exports from the country during 2006-07.
The subsidy was limited to the export of a maximum of 20,000 tn of the commodity. India exported 28,750 tn pepper during the year.
Bafana also exported pepper to non-traditional markets such as Taiwan, Philippines, and Dominican Republic etc. during the year, said its Chairman Ratanlal Bafana.
New markets may appear insignificant in terms of quantity and value but they have helped to sustain momentum of exports during the year, he added.
Supply squeeze in Vietnam from later half of 2006 might have prompted buyers from these places to turn to India, he said.
"We have made a good beginning in non-traditional markets like Taiwan and we hope to build on it in coming days," he said.
Pepper exports from India to Taiwan rose to 236 tn during 2006-07 compared with 30-40 tn in preceding years, according to a Spices Board official.
Exports to Philippines also rose to 112 tn from a low level of less than 40 tn during the year, he added.
Top seven pepper exporters received around 80 mln rupees out of the total subsidy amount of 140 mln rupees during the year.
Kishore Shamji, another leading exporter, received 14 mln rupees under the subsidy scheme by exporting 3,000 tn. End

NewsWire18 Tel +91 (484) 2430-354
Send comments to feedback@newswire18.com

FROM VIETNAM

7 June 2007.

Dear valued Buyers,


Pepper is very interesting markets in this year, prices are up, up so much and make many people are very nervous to trade this item. Nobody think it is high like that!!! Increadible prices, from usd 2,400 per mt to USD 2,700 per mt and until sometimes up to usd 3,950 fob for 500 gr/l. so many buyers/traders are reluctant to buy pepper, many processing factories in EU decided not to buy at high prices and wait. From Feb 2007 they wait prices better in Mar but prices was up, up and they have waited until now is FH June 2007. some factories they use last berries to process and hope prices comeing down.

The Giant traders are have not better positions. They sold alots forward contracts at cheap and hope they can cover in Mar/April and they told many buyers in EU not to buy and wait, prices would be sure down in Mar/April however until end May/FH June prices are not really better!!! And they sold already, many contracts need to be delivered. Some traders in Origin they don’t deliver, the Big traders are negotiating with buyers to delay 2 or 3 months to help them not to get BIG LOSS, many short positions we can see from very BIG traders in HOLAND in Vietnam. Some buyers agreed but some asked them to ship on time since they need very much pepper to process!

And we heard that some BRAZIL sold forward positions at very cheap levels!!!

What they(Big traders) have to do now??? They pread news to all buyers in EU/American not to buy to press prices down! therefore there is not so many demands from EU/America. Buyers wait, another hand traders continue to buy to cover their positions which some processing buyers not to agree to ship pepper late.

So one question! How many tons VN have? If VN have more quantity, prices shud be down but as you see many times prices are easy alittle bit, and then it goes up shuddenly!!! Sine NOT MUCH PEPPER left!!! And one thing is the true is that NEXT YEAR crop is worst than this year so prices will be very high since the farms/trees are in insects postions and many trees are dead!!! And insects spread out to next farms with high speed so we can say 40% Less quantity in Crop Next Year 2008!!!

Thank you very much and we do hope buyers/processing buyers have right decision to purchse goods on time with correct prices.

Kind regards,
Phan Minh Thong
----------------------------------------------------------------------
PHUCSINH COMPANY LIMITED.

Re: Black pepper market has been flat

Well am an importer of Black Pepper in Pakistan.
In the last day or two market for black pepper has suppenly stopped and has reversed a lot.
Rumors effect a lot in a speculative market.
10 days back it looked that the vietnam prices might reach usd4400 or usd4500/pmt for 500gl,as there was no offer from any other country.
But suddenly from no where Malaysia is offering stock,Srilanka is offering,Indonesia is also offering.
And now no buyers.
The way i look at the current situation, Vietnam 2007 crop is damaged,maximum damage could be up to 20%.In the past Vietnam has been exporting like 120,000mt per year.Less 20% still 100,000mt of crop.
And till now the export demand has been very less due to the higher prices.
I ve heard that till now only 25000mt or more have been exported in this quantity last year carry over is also included.
May almost finished,july Brazil crops starts.
So i think that vietnam will have to lowers its prices.
Anonimous

Re: Black pepper market has been flat

End Users demand has been decreasing whereas re-sellers are only buyers..............................A note of danger.........actual users have not bought when the exports were at peak(Q1)........In April the exports were poor overall................so chances of them buying is dull. I feel the market to go down sharply........
BE CAUTIOUS A GREAT FALL MAY BE AWAITING

SURESH

Re: Black pepper market has been flat

it is a false news that vietnam decresed its price .in vietnam still there is no seller
Anonimous

India - Pepper crashes big today

Dear M W,
Pepper crashes big today !!!
MG I asta grade at $ 3550 pmt fob cochin for prmpt
buyers are gone, sellers on top.
Thanks / b rgds

Re: Black pepper market has been flat

Stocks in warehouses of NCDEX are seen at 8490 MT.
Vietnam has not given any clue to global traders regarding its export intentions.
Buyers like China, USA etc prefer to watch the global activities for a while. This explains slower trading activity across the world during the week ending May 19th.
Producers’ offers in India are averaging around USD 3430-3435/MT ex-Kochi - down 1% from previous week.
Meanwhile the FOB markets maintained a steady trend throughout the previous week.

Abhijeet Banerjee

Black pepper market has been flat

For 2 weeks in a row black pepper market has been flat with no buyers interest and still no prices decline could be foreseen in Brazil.
Vietnam reported some ease with 500 gl prices offered at U$D 3,600 today.
Indonesia also easier - U$D 3,850 pmt Lasta.
Brazilian farmers and exporters are holding firm on the 3,800 pmt fob level for the B1 560 gl. possibly due to continuos advises from ABEP that market will continue strong. On the other hand the weakness of the dollar does not help much to accept cheaper prices - it reached the cheapest price in 6 years - today R$ 1,94 / U$ 1,00
This week we publish the new brazilian export statistics for the first quarter. Also USA statistics for the first trimester are available.

INFO VIETNAM

Dear Sir,

Thks for info.
May I point out few aspects?

a- We think the rally is not finished as in Vietnam:
1- Crop 07 (85% harvested) has dropped by at least 20% to reach +/= 90,000 Mt (old trees, low yield due to lack of fertilizer , insect damage on roots), and for the following years, it should stand below 100,000 mt.
2- Low carry over from 2006.
3- Farmers are also in strong position as they do not produce only pepper but other commodities (coffee price was good this year > 1,400$ /mt) or spices.
4- Delays and defaults occurring also.

b-
1- On top of that Indonesia crop still show some weakness in their production (2006<35,000 Mt) and local prices are higher than Vietnam.
2- World offer/demand seems to be in deficit of at least 10%.
3- Low stocks in Consuming countries (mainly is US and Europe)
4- China and India still increase their consumption.

Although it will happen that at some point (4,500$, 5,000$??), Vietnamese farmers start selling but intermediary traders may hold part of it it as well. Rumors that outsiders of spice business start having long position of Pepper and we don’t expect them to release their position for few hundred dollars only!!

We remain bullish torward this market. As soon as we break the psychological level of 4,000$, the roof is open!

Keep in touch and further infos about Brazilian crop will be appreciated.
Thks & Brgds
Francois Bouvery
Sucrex-Export SA (Sucrex-Asia Vietnam)

Pepper Mkt overview

Pepper Price is set to hit another round of bull-run in the next few days due to sellers’ mostly cutting supply in major producing countries. According to our analysis in major consuming countries carryover stocks are fast getting depleted with limited scope for ready replacement.

Over dependence on single source for quite sometime is the main reason for the present predicament. Buyers from all over the world had an opportunity to contract quality Malabar pepper at reasonable levels of U.S. $1.2-1.35 before the bull run started in right earnest. Exporters in India were in a position to deliver substantial quantities due to the huge turnover in commodity exchanges. Average turnover in these exchanges is around 60,000 mt with the near month contracts always having good liquidity.

The situation has undergone a major change as the largest producer and exporter opting for a staggered selling strategy by holding on to stocks. This has created a new situation for global pepper industry and in this scenario commodity exchanges in India are fast turning out to be brand ambassadors for Vietnamese pepper growers and sellers.

Several investors with backing from funds are now involved Malabar pepper India’s commodity exchanges and the next month contract is having a premium of 40%. Exporters of black pepper from India are doing more deals in these commodity exchanges since February as they are assured of high returns without the hassles of shortage in weight, light berries, excreta presence etc. Exporters also receive the payment as early as 48 hours. Buyers need to come with innovative ideas to deal with the new situation as exporters from India are not having any compelling reason to chase buyers.

According to our analysis coming two weeks will be very interesting to watch . So wait and see what’s going to happen in black gold in the next fortnight.

Best Regards

Jojan Malayil

Pepper Price to go further up

Gentlemen,

Re your "vernoticia" report dtd 2007/04/17. Please note from our view point:

1. Brazil is unable to offer easily, because the remaining carryover is too reduced and growers thinking very high prices henceforth, i.e. R$10,00/kg, which means, abt USD5.000/ton at growers.

2. Growers seeing a new crop 2007 very small, so, they prefer await elsemore.

3. Vietnam has just jumped up from VND44.000/kg to VND49.000/kg and who knows tomorrow or a little more ahead it will achieve?

As far as everybody are concerned, upon Asta meeting time, all the world trading has a stopover.

Best rgds
Nonato Moreira
President - ABEP