PEPPER - A MODERATE VIEW

Dear Sir
Good day
Please publish this article.
Best Regards
Quote
Dubai
19/01/2012
International Pepper maket starts showing some signs of life Thanks to report published in the "Vietnam News" 19/01/2012.
The report is self explanatory claiming that Vietnam shall export only 86000 MT of Pepper in year 2012-a 30 pct decrease in production.The reason explained behind this claim is the death of old plants.
It seems very strange that In November 2011 Vietnam Pepper Association has presented his figures upto 110000 tons which itself was objected by independent sources and traders in Lambok.Many reliable sources are of the view that pepper production in Vietnam is not less than 135000 MT for 2012 crop.
For last many weeks pepper has been the most silent spice.In year 2011 Vietnam new crop started @usd4200 fob and comlpeted the upward journey till 8400. exactly double.Then started coming back and stopped at 5500 last week.People were thinking that the price could touch usd5000 or even lesser but some immediate demand before TET holidays and this report has suddenly pumped bullish sentiments in the market.
Even the cheapest market Dubai has improvment that had already reached 5200 level this week.
Will it continue.Thats a question?
If we check some years history its evident that people stops shopping 3-4 months before Vietnam new crop arrival and after Tet holidays when Vietnamese resume their business activities thay see a lot of demand and immediately raise the prices.This year the story is not much different but with one change.Consuming markets are not not empty.Middle east and even Europe has pepper.Though the traders are showing reluctance in releasing the high priced cargo but its the fact pepper is there unlike last year.
People need to show some patience in their shopping if they want to make market suitable for all the stakeholders of the industry.If they trust in baseless reports and rumours ,it will repeat last years result .Defaults for low priced contracts and losses in high priced goods.
We shall have to see fundamentals too.
1-The supply for 2012 is not meagre.
2-There is no supply demand mismatch for pepper in 2012.
3-Economic conditions in Europe and all over the world are not remarkable.
4-All other agriculture commodities and specially spices have been travelling fast to South.Like Cardamom has 75 pct drop .In the same way cloves 50 pct,Cummin 30 pct .In other commodities Rice ,wheat,sugar all have lost much.
So one must be careful in giving bids.

Thanks and best Regards
Muhammad Asif Qureshi
General Manager
Commodity King Traders LLC
Nuts & Spices Agent
Member
INC(International Nut &Driedfruit Council)
CENTA(The Combined Edible Nut Trade Association,UK )