India pepper - Heavy Pressure mounts on Bulls

New Delhi 22/10/2009
The Indian Black Pepper currently priced highest in the world next to Malay Pepper has come under pressure as there are no demands for it from overseas markets and the expected buying from domestic market still to come. With Indian rupee appreciating against usd the cfr prices out of India has become very expensive keeping overseas importers away but it was interesting to see although the currencies in Brazil and Indonesia were also close to 6% stronger against usd they have not increased their asking prices like India. Vietnam who is said to have exported more than 110000 mt is still willing to wheel and deal with 500 gl faq pepper offered @ usd 2600 pmt fob Hcmc and 550 gl pepper offered @ usd 2750 pmt fob Hcmc and Vietnam Special Asta 570 gl and no guarantees on light pepper is offered @ usd 3000 fob Hcmc for shipment very promptly after placing orders According to Ms Nguyen who has been associated with Vietnam pepper exports ever since they have started exports of both black and white pepper and a very trusted source who added the current typhoon loss is not to exceed 5000 mt of production for 2010 .

Reports from Hcmc states that Vietnam has already exported 3665 mt pepper in the first 15 days making the balance available stock to only 1952 mt as per Hindu business Line a leading business daily who are following every movement on a 24 hour basis but the fact is Vietnam still has 20000 mt more to export before the new crop hits in February 2010 who have weighed the balance stocks on 30th September 30th at 5617 tm. These kind of absurd news really misleads small and medium players in pepper who are vanishing on a daily basis because of the excessive speculation happening on pepper in the National Exchanges. They have 6 contracts in place but 90% of the trade is happening only on the near month contract and nothing is happening on the far month which means no price discovery is happening in the exchange but only rampant speculation.

The Bulls in India will be saved only by domestic demand as value added processors are back into imports who at one point have completely written off imports for the rest of the year. With higher prices currently in India and weaker usd favors imports value added processors who at one point hedged their overseas sales in Indian exchanges are now seen selling off and replacing it with cheaper imported pepper out of Sri Lanka and Indonesia



Jennifer LaRive