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)