Spot Pepper shortage taken care by Comex for September requirements and future prices crash

Kochi/27th August 2010/ 05 45 HRS IST Emmar Jay



The actual users who were confronted with almost nil supplies from farmers and local traders finally learned how to meet their requirement of pepper for immediate needs which they missed at 187/- a kg a fortnight ago by clicking the button of the computer and took home 1403 mt at 206 kg from the national comex in the nearmonth contract which matured on Friday the 20th August. The hue and cry of lack of supplies for some time is now over and in the coming months the stocks lying in the National Comexes will be over which was increasing every other week with indian pepper prices currently highest and outpriced in the world market since last 10 weeks . Throughout this year whenever there was an oppurtunity seen on arbitrage investors were buying exchange delivered Mg1 and the supply to the terminal market has been an issue as upcountry traders have become packers and suppliers to Investors which reduced the movement to the main terminal market Cochin. Another reason for the reduced or almost nil arrival is the lower prices published by the price publishing company IPSTA for sometime which was far from real traded prices and upcountry dealers deserting the terminal market market sources said.

Week 33 was an action packed week with Vietnam increasing the prices from usd 3700 fob Hcmc to usd 4050 fob hcmc for their most traded variety 500 g/l and Brazil increased the asking prices of their B1 variety from usd 3800 fob belem to usd 4100 fob Belem and indonesia increasing the asta prices from usd 4150 cnf Newyork to usd 4550 pmt and some shippers were completely withdrawn waiting for more arrivals to come before making further sales. Actually the Indonesian ASTA pepper sellers are very few and they have to take care of the entire crop as almost 90% ofthe crop is sold during the harvest season itself and exportes need cash to rotate stocks. Although the crop is only 22-25000 mt for Black pepper the huge carry over left behind them which is almost same as the crop of 2010 is said to be the reason why Indonesia has become the biggest ASTA grade pepper supplier since last 2 years and this will continue into 2011.The Vietnamese and Indian speculators are holding the Umbrella for the Indonesians to market their pepper comfortably rhis year too, we can understand Vietnam doing so with more than 100,000 mt pepper being out of the country in the first seven months and said to be having only 40,000 mt more and some say 20,000 mt and according to VPA its all over and they are surprised how their estimates went wrong which was very well arrived by a team of experts of VPA consisting of pioneers in the field such as

- KSS Vietnam Co,.Ltd
- Nedspice Vietnam Co,.Ltd
- Domesco JSC
- An Huy B.T Co,.Ltd
- Comco Co,.Ltd
- Maseco JSC
- Nam Viet Co,.Ltd
- Chu Se Pepper Association
-Olam Vietnam Co,.Ltd
- V.K.L Vietnam Co,.Ltd


source http://www.peppervietnam.com/en/news_detail.php?id=5340&id_groupN=32&id_catN=6

- Authorized provincial departments  came to the conclusion , the average productivity of main provinces would be 20 – 25% less than previous year. So that the total output will be 90,000 MT ( 20% lower than last year)

Black pepper is in the hands of speculators in all origins and one can see heavy volatility in the physical markets there and in the futures market here and its advisable that retail investors should stay awat from the scene as there is no protection availabe as the market watchdog do not know how to regulate and control the futrues market and its high time the fmc is scrapped and the regulation should be handed over to SEBI otherwise the mechanism will be completely destroyed by misinformers and mighty titans who has no role to play in a commodity which they have not even seen.

Emmar Jay