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