This has been a tough year for the Pepper market operators.
After early rise in prices, peaking in February, market started its descence in a setady and solid path which culminated in October whith the world crisis and the Dolar volatility.
Commodities suffered too and the crisis is said to be the worst since the 29 bankruptcy.
However some points deserve a more detailed consideration.
This crisis is essentialy a monetary crisis - lack of moneys. But what moneys ? The fake ones - virtual moneys that did not exist - actualy never existed. Just promises of payment.
There´s a need to separate the physical from the virtual. Sure, jobs and salaries will be lost and the consumption will be reduced to a degree. The consumption of luxury articles will suffer as well as housing, cars, and other big value items. But we do not see the food industry or pharmaceutical, or any other for primary needs to suffer in the same extent as the rest. People will still eat - even because it´s the cheapest expense. To put all the produce in the same basket is an error or can one imagine the guns industry reducing prices due to lack of demand?
There´s life beyond futures trading...
The problem is that such catarse open doors to speculators to manipulate the markets.
Friday, November 07, 2008
Shortage of Pepper in India
DEAR SIR, WE ARE THE LEADING EXPORTER IN INDIA.........MY NAME IS BASKER.
IN INDIA AT TODAY POSITION,THERE IS NO STOCK OF PEPPER...
IN FUTURE THERE IS THE TOTAL CROP NEARLY 35000 TONNES,DECRESE BY 35%.....
SO MY VIEW IS THE ,PEPPER RATE WILL BE 4000$ VERY SHORTLY..........
THANK YOU.......
IF YOU HAVE ANY VIEW IN PEPPER SEND ME SIR................
IN INDIA AT TODAY POSITION,THERE IS NO STOCK OF PEPPER...
IN FUTURE THERE IS THE TOTAL CROP NEARLY 35000 TONNES,DECRESE BY 35%.....
SO MY VIEW IS THE ,PEPPER RATE WILL BE 4000$ VERY SHORTLY..........
THANK YOU.......
IF YOU HAVE ANY VIEW IN PEPPER SEND ME SIR................
Indian and the International Pepper market
Dear Sir,
Kindly find below our take on the Indian and the International Pepper market.
Black Pepper Market Report;
The Indian Pepper Exchange has been the principle reason for the markets coming down from levels of 4000 USD/MT to levels of 2600 USD/MT FOB for MG1 ASTA. Between the price movements is a whole story waiting to be told.
The Indian exchange is charateristic of such price movements, even from before. But, the reason behind the current drop, non withstanding, the future outlook is still important and worthy of consideration.
The Indian markets have come down during the months of September, Oct, Nov. These months are also periods of short arrivals in the markets as the season is over and physical availability is close to non existant. This non availability automatically forces the markets, sellers and buyers alike to take long positions in the exchange market for their physical commitments. The exchanges, most of them having their own insider trading, use this opportunity to make quick bucks, by bringing the market down.
The exporter community in India is a small community. The whole of the Indian exporting community at any point of time, is capable of holding sales of about 8000 Tons. The stocks in the exchange are available in a monthly once delivery period interval. It is a surprise that the stocks held in the exchange for deliveries for the next 6 months are lessor than 2800 Tons.
http://www.ncdex.com/Downloads/ClearingServices/52%c2%a7142%c2%a7comm_mis_03112008_FED.pdf
This means with the exporters overcommitting by thousands of tons every month, there are likely to be defaults in the months to come if markets stays at current levels. There are no physical arrivals in the market from farm gate level. The monthly requirement of about 3000 tons in this dull market, being the domestic demand is being catered to by the stock holders. At the current trend and at the rate at which stocks are being depleted, we are very firmly of the opinion that the markets will soon run out of physical stocks for the domestic market. What about export commitments. We know that domestic business running into defaults is not a new thing to happen.
But, the Indian exporter community has never defaulted in the International market. Serious shippers will have to ship at any price. The exchange can default by paying a penalty of 3%. This is where, the exporting community is staking in the Indian exchange.
It is important to note, the current stock levels in India.
We estimate it as below;
Domestic sale centres- 750 Tons.
Origins- 2000 TonsPepper Exchange - 2800 Tons
Iron Stocks, Dealers, Traders etc- 2500 Tons
Total Stocks - 8050 Tons
Indian consumption for the months of November and December- 6000 Tons.
Exporters commitment for this period- 4000 Tons.
Exporters commitment for Jan- July - 4000 Tons.
The whole market has been wrestled down, considering technical charts. The markets have been brought down at a period when the USD has been appreciating against the Ruppee. But the Indian markets have also fallen considerably in Ruppee terms. Dollar is today fetching 48 Rs while 4 months back, it was fething 40 Rs. This has in fact even more exxagerated the fall.
The Indian new Crop; The Indian Season might be delayed this year, upto February. We have seen last year, that the Indian new crop started tricking in only by the beginning of February. This year too due to delayed monsoons, we might see such a trend. The Indian new crop, promises to be phenomenally low sized crop. Due to never seen before weather patterns, Indian pepper crop is probably down by a half from the worlds favorite origin.
Last years crop was estimated thus;
Kerala; 26000 Tons
Karanataka; 13000 tons
Tamil Nadu; 4000 tons
Rest of India; 2000 Tons
The Indian weather played havoc with drought conditions prevailing upto July, three months down the Rainy season. Below are links that will clearly depict these matters to highlight the weather conditions in Malabar region.
http://www.thehindubusinessline.com/2004/03/03/stories/2004030300591300.htm
http://www.thehindubusinessline.com/2004/03/04/stories/2004030401221700.htm
http://www.thaindian.com/newsportal/business/kerala-set-to-face-water-shortage-due-to-poor-monsoon_10068608.html
http://www.thaindian.com/newsportal/enviornment/water-water-everywhere-in-kerala-but-very-little-to-drink_10070910.html
Black Pepper is a water pollinated crop. With lack of rains in the growing areas right upto the end of July, and then rains that followed, which started as though the dams of heaven were opened up has lead to large scale destruction of agricultural produce in general, and to pepper, it has created havoc. Karanataka, which is beigbouring Kerala, has been declared a drought area too. Tamil Nadu also has been declared a drought Area by the National Commission.
News artilces declaring Tamil Nadu as drought hit
http://www.hinduonnet.com/fline/fl2106/stories/20040326003103500.htm
http://www.hinduonnet.com/2001/08/05/stories/0505134d.htmhttp://desertification.wordpress.com/2008/07/08/tamil-nadu-should-prepare-for-drought-report-google-business-standard/
News articles declaring Karantaka as drought hit
http://www.hindu.com/2008/08/23/stories/2008082354870600.htm
http://www.hindu.com/2008/10/19/stories/2008101950870300.htm
The Indian pepper crop of Kerala and its neighbouring karantaka and Tamil nadu stand estimated as below;
Kerala; 15000 Tons
Karnataka; 14000 Tons
Tamil Nadu; 2000 Tons
Rest of India; 2000 Tons
Total 33000 Tons.
We are preparing and sending this report hoping that this will help you decide if India, should be the reason that the world market be held down. In India, the exporting community fears that selling overseas will mean, that they will have to prepare for the worst in the time to come. With the new crop starting in February, and buffer stocks down to super critical levels, India is a dangerous market.
India has never had as low buffer as it is carrying now. At any point of time, over the last 6 years, India has carried stocks between 60000 tons - 25000 tons. This is perhaps the first time in recent history that India is carrying lessor than 10000 tons of stocks, and even that is sold overseas by way of contracts.
We feel that like all technicals, this would bounce back up with the same momentum. Kindly be guided by reason while making decisions and not purely sentiment. We have seen the best of buyers miss the best of opportunities, as they fall in fear.
Regards
Rawther
Kindly find below our take on the Indian and the International Pepper market.
Black Pepper Market Report;
The Indian Pepper Exchange has been the principle reason for the markets coming down from levels of 4000 USD/MT to levels of 2600 USD/MT FOB for MG1 ASTA. Between the price movements is a whole story waiting to be told.
The Indian exchange is charateristic of such price movements, even from before. But, the reason behind the current drop, non withstanding, the future outlook is still important and worthy of consideration.
The Indian markets have come down during the months of September, Oct, Nov. These months are also periods of short arrivals in the markets as the season is over and physical availability is close to non existant. This non availability automatically forces the markets, sellers and buyers alike to take long positions in the exchange market for their physical commitments. The exchanges, most of them having their own insider trading, use this opportunity to make quick bucks, by bringing the market down.
The exporter community in India is a small community. The whole of the Indian exporting community at any point of time, is capable of holding sales of about 8000 Tons. The stocks in the exchange are available in a monthly once delivery period interval. It is a surprise that the stocks held in the exchange for deliveries for the next 6 months are lessor than 2800 Tons.
http://www.ncdex.com/Downloads/ClearingServices/52%c2%a7142%c2%a7comm_mis_03112008_FED.pdf
This means with the exporters overcommitting by thousands of tons every month, there are likely to be defaults in the months to come if markets stays at current levels. There are no physical arrivals in the market from farm gate level. The monthly requirement of about 3000 tons in this dull market, being the domestic demand is being catered to by the stock holders. At the current trend and at the rate at which stocks are being depleted, we are very firmly of the opinion that the markets will soon run out of physical stocks for the domestic market. What about export commitments. We know that domestic business running into defaults is not a new thing to happen.
But, the Indian exporter community has never defaulted in the International market. Serious shippers will have to ship at any price. The exchange can default by paying a penalty of 3%. This is where, the exporting community is staking in the Indian exchange.
It is important to note, the current stock levels in India.
We estimate it as below;
Domestic sale centres- 750 Tons.
Origins- 2000 TonsPepper Exchange - 2800 Tons
Iron Stocks, Dealers, Traders etc- 2500 Tons
Total Stocks - 8050 Tons
Indian consumption for the months of November and December- 6000 Tons.
Exporters commitment for this period- 4000 Tons.
Exporters commitment for Jan- July - 4000 Tons.
The whole market has been wrestled down, considering technical charts. The markets have been brought down at a period when the USD has been appreciating against the Ruppee. But the Indian markets have also fallen considerably in Ruppee terms. Dollar is today fetching 48 Rs while 4 months back, it was fething 40 Rs. This has in fact even more exxagerated the fall.
The Indian new Crop; The Indian Season might be delayed this year, upto February. We have seen last year, that the Indian new crop started tricking in only by the beginning of February. This year too due to delayed monsoons, we might see such a trend. The Indian new crop, promises to be phenomenally low sized crop. Due to never seen before weather patterns, Indian pepper crop is probably down by a half from the worlds favorite origin.
Last years crop was estimated thus;
Kerala; 26000 Tons
Karanataka; 13000 tons
Tamil Nadu; 4000 tons
Rest of India; 2000 Tons
The Indian weather played havoc with drought conditions prevailing upto July, three months down the Rainy season. Below are links that will clearly depict these matters to highlight the weather conditions in Malabar region.
http://www.thehindubusinessline.com/2004/03/03/stories/2004030300591300.htm
http://www.thehindubusinessline.com/2004/03/04/stories/2004030401221700.htm
http://www.thaindian.com/newsportal/business/kerala-set-to-face-water-shortage-due-to-poor-monsoon_10068608.html
http://www.thaindian.com/newsportal/enviornment/water-water-everywhere-in-kerala-but-very-little-to-drink_10070910.html
Black Pepper is a water pollinated crop. With lack of rains in the growing areas right upto the end of July, and then rains that followed, which started as though the dams of heaven were opened up has lead to large scale destruction of agricultural produce in general, and to pepper, it has created havoc. Karanataka, which is beigbouring Kerala, has been declared a drought area too. Tamil Nadu also has been declared a drought Area by the National Commission.
News artilces declaring Tamil Nadu as drought hit
http://www.hinduonnet.com/fline/fl2106/stories/20040326003103500.htm
http://www.hinduonnet.com/2001/08/05/stories/0505134d.htmhttp://desertification.wordpress.com/2008/07/08/tamil-nadu-should-prepare-for-drought-report-google-business-standard/
News articles declaring Karantaka as drought hit
http://www.hindu.com/2008/08/23/stories/2008082354870600.htm
http://www.hindu.com/2008/10/19/stories/2008101950870300.htm
The Indian pepper crop of Kerala and its neighbouring karantaka and Tamil nadu stand estimated as below;
Kerala; 15000 Tons
Karnataka; 14000 Tons
Tamil Nadu; 2000 Tons
Rest of India; 2000 Tons
Total 33000 Tons.
We are preparing and sending this report hoping that this will help you decide if India, should be the reason that the world market be held down. In India, the exporting community fears that selling overseas will mean, that they will have to prepare for the worst in the time to come. With the new crop starting in February, and buffer stocks down to super critical levels, India is a dangerous market.
India has never had as low buffer as it is carrying now. At any point of time, over the last 6 years, India has carried stocks between 60000 tons - 25000 tons. This is perhaps the first time in recent history that India is carrying lessor than 10000 tons of stocks, and even that is sold overseas by way of contracts.
We feel that like all technicals, this would bounce back up with the same momentum. Kindly be guided by reason while making decisions and not purely sentiment. We have seen the best of buyers miss the best of opportunities, as they fall in fear.
Regards
Rawther
Tuesday, May 06, 2008
Ncdex - Gamblers safehaven and exporters nightmare
Ncdex(National Commodities derivatives Exchange) Gamblers safehaven and exporters nightmare
Jojan malayil
If you ask me the most dangerous thing you do in the national commodity exchange i will say trading in Ncdex who handles most of the agri commodities futures . The organisation is run by certain numbheaded ex bank officials and new generation MBA!s who has absolutely no knowldge about what you call as domain knowledge.The whole organisation is in the hands of just 10 financially sound broking companies who twists and make the byelaws of the exchange according to thier books , whims and fancies and controls 90% of the volume of the exchange.There is no control over the individual operations of certain members but strictures are put on genuine broking members who follows the norms and never cross the limits.These people operate against all fundamentals of the market and certain times corners a certain commodity because of their muscle and money power.
Just to naarate a very recent incident which happened to us in the recently concluded april 2008 chillies contract 2008 april.We were long and opted for delivery of our 100 mt due to our unfulfilled overseas obligations and the prices offerd to us by ncdex qualty delivered to accredited warehouses of ncdex was much higher than what was traded in the exchange . On the closing day of contract the market hit 2 uppercircuits as sellers were trying to opt out for deliveries as open market prices were much higher.Ncdex came out with a settlement price which they claim they have pooled through their accredited spot monitoring agency Rs 3 lower and settled the contract defaulting delivery anf giving us 21 paise per kilo.We just cant understand the logic of not being allowed the M2 M for us and if a Gambler who would have sold without stocks in the last miniute after paying 2.5% penalities would have walked away 2ith Rs 1.90/- kg and a genuine exporter who would have taken a position in the last day for his unfulfilled overseas obligation would have paid from his pocket Rs 3.05/-kg .
As an exporter who has been hedging overseas commitments in regional exchanges without any problems in the past 28 years is now hit severely both mentally and financially with the lack of domain knowledge of National Commodities and Derivatives Exchange (NCdex) and would warn exporters to keep away from this exchange for their own safety and should promote other exchanges where compulory delivery is compulsory in the liereal meaning of the word and they have systems in place to check so the genuine hedgers are protected.Also would appeal overseas traders who are following the movements in Ncdex pepper and not to waste their time and dont get cheated with the irrevalent quotes which comes which has no relation with the spot market in India.
Jojan malayil
If you ask me the most dangerous thing you do in the national commodity exchange i will say trading in Ncdex who handles most of the agri commodities futures . The organisation is run by certain numbheaded ex bank officials and new generation MBA!s who has absolutely no knowldge about what you call as domain knowledge.The whole organisation is in the hands of just 10 financially sound broking companies who twists and make the byelaws of the exchange according to thier books , whims and fancies and controls 90% of the volume of the exchange.There is no control over the individual operations of certain members but strictures are put on genuine broking members who follows the norms and never cross the limits.These people operate against all fundamentals of the market and certain times corners a certain commodity because of their muscle and money power.
Just to naarate a very recent incident which happened to us in the recently concluded april 2008 chillies contract 2008 april.We were long and opted for delivery of our 100 mt due to our unfulfilled overseas obligations and the prices offerd to us by ncdex qualty delivered to accredited warehouses of ncdex was much higher than what was traded in the exchange . On the closing day of contract the market hit 2 uppercircuits as sellers were trying to opt out for deliveries as open market prices were much higher.Ncdex came out with a settlement price which they claim they have pooled through their accredited spot monitoring agency Rs 3 lower and settled the contract defaulting delivery anf giving us 21 paise per kilo.We just cant understand the logic of not being allowed the M2 M for us and if a Gambler who would have sold without stocks in the last miniute after paying 2.5% penalities would have walked away 2ith Rs 1.90/- kg and a genuine exporter who would have taken a position in the last day for his unfulfilled overseas obligation would have paid from his pocket Rs 3.05/-kg .
As an exporter who has been hedging overseas commitments in regional exchanges without any problems in the past 28 years is now hit severely both mentally and financially with the lack of domain knowledge of National Commodities and Derivatives Exchange (NCdex) and would warn exporters to keep away from this exchange for their own safety and should promote other exchanges where compulory delivery is compulsory in the liereal meaning of the word and they have systems in place to check so the genuine hedgers are protected.Also would appeal overseas traders who are following the movements in Ncdex pepper and not to waste their time and dont get cheated with the irrevalent quotes which comes which has no relation with the spot market in India.
Saturday, January 12, 2008
Indonesian demand sparks hike in cloves
The Public Ledger
Monday January 14 2008
INTERNATIONAL cloves prices have shown sharp increases over these early stages of the new year, fuelled largely by strong domestic demand in Indonesia and heightened speculation.
In the week ending January 11, European traders quoted Indonesian cloves at $6,200 a tonne c&f Singapore, compared with $4,100 a tonne in the week ending December 21. Over the same period Madagascan cloves were said to have reached $5,000 a tonne cif against $4,450 a tonne previously.
One Bangalore trader told The Public Ledger that Indonesia's major cigarette companies Gudang Garam and Samporena were purchasing cloves at higher market prices in order to cover local demand. Also, according to the same trader, local prices in Indonesia were as high as Rp60,000 per kg, equating to $6,200 a tonne fob Surbaya. Moreover, the trader added that his company had purchased Indonesian cloves at $5,700 to $5,800 a tonne in the last few days.
The Bangalore trader viewed Madagascan cloves as being quoted higher than the indications from European traders, citing instances of offers at $5,500 a tonne fob Tamatave.
Emmanuel Nee of French trader Sivanil agreed that strong domestic buying by Indonesian cigarette companies was pushing up prices. In addition, some Indonesian speculators were sitting on stocks. "Each time they receive a single demand they push the price up by $100 [a tonne], " he said. The weakness of the US dollar was also lending support to prices.
Mr Nee explained that the week to January 11 had been paticularly active, helping to push prices up to the latest highs and attain the peaks that Indian traders had projected.
"Although they (Indian traders) have not been exaggerating the trend, they were very early in their predictions, "Mr Nee observed. "Today they are not really buying at this level but they want to tell everyone the market is moving up and will keep on doing so because this will help the domestic market to awaken. Indian buyers are enquiring a lot, asking for small shipments here and there, but they are not buying huge quantities at this level." In addition, Mr Nee claimed that those who use cloves for cooking applications tend to limit their offtake when prices are high.Moreover, he viewed the latest surge in prices as driven solely by speculation. "The speculation is done on the fact that Indonesia has been buying a lot so the available stocks in Indonesia are not a lot and the next crop will not be as good as they expect. If that is the case Indonesia will come to the market and buy again, " Mr Nee said.
Moreover, if the forthcoming Indonesian crop turns out to be very small, then domestic and world prices could see some further short-term increases, he noted.
Mr Nee commented further that Singapore traders were making only tentative offers but no actual deals were being made. "In the meantime, Madagascar shippers are not offering anything and Comoros is empty in cloves, " he said.
Claude Cuvillier of the French broker of the same name remarked: "It is difficult to find sellers in Madagascar."
Monday January 14 2008
INTERNATIONAL cloves prices have shown sharp increases over these early stages of the new year, fuelled largely by strong domestic demand in Indonesia and heightened speculation.
In the week ending January 11, European traders quoted Indonesian cloves at $6,200 a tonne c&f Singapore, compared with $4,100 a tonne in the week ending December 21. Over the same period Madagascan cloves were said to have reached $5,000 a tonne cif against $4,450 a tonne previously.
One Bangalore trader told The Public Ledger that Indonesia's major cigarette companies Gudang Garam and Samporena were purchasing cloves at higher market prices in order to cover local demand. Also, according to the same trader, local prices in Indonesia were as high as Rp60,000 per kg, equating to $6,200 a tonne fob Surbaya. Moreover, the trader added that his company had purchased Indonesian cloves at $5,700 to $5,800 a tonne in the last few days.
The Bangalore trader viewed Madagascan cloves as being quoted higher than the indications from European traders, citing instances of offers at $5,500 a tonne fob Tamatave.
Emmanuel Nee of French trader Sivanil agreed that strong domestic buying by Indonesian cigarette companies was pushing up prices. In addition, some Indonesian speculators were sitting on stocks. "Each time they receive a single demand they push the price up by $100 [a tonne], " he said. The weakness of the US dollar was also lending support to prices.
Mr Nee explained that the week to January 11 had been paticularly active, helping to push prices up to the latest highs and attain the peaks that Indian traders had projected.
"Although they (Indian traders) have not been exaggerating the trend, they were very early in their predictions, "Mr Nee observed. "Today they are not really buying at this level but they want to tell everyone the market is moving up and will keep on doing so because this will help the domestic market to awaken. Indian buyers are enquiring a lot, asking for small shipments here and there, but they are not buying huge quantities at this level." In addition, Mr Nee claimed that those who use cloves for cooking applications tend to limit their offtake when prices are high.Moreover, he viewed the latest surge in prices as driven solely by speculation. "The speculation is done on the fact that Indonesia has been buying a lot so the available stocks in Indonesia are not a lot and the next crop will not be as good as they expect. If that is the case Indonesia will come to the market and buy again, " Mr Nee said.
Moreover, if the forthcoming Indonesian crop turns out to be very small, then domestic and world prices could see some further short-term increases, he noted.
Mr Nee commented further that Singapore traders were making only tentative offers but no actual deals were being made. "In the meantime, Madagascar shippers are not offering anything and Comoros is empty in cloves, " he said.
Claude Cuvillier of the French broker of the same name remarked: "It is difficult to find sellers in Madagascar."
Cloves’ prices rise 25% as arrivals fall in Brazil
G.K. Nair
Kochi, Jan. 11 Export prices of cloves in Brazil have soared by 25 per cent this week following decline in arrivals at the market there.
Latest reports, according to information made available to Business Line by the Brazilian Pepper Trade Board (BPTB), which trades in spices, “the harvest is smaller than originally previewed – between 4,000-5,000 tonnes. We believe that bids below $4,700 would not be considered at this moment”.
New crop of cloves is slowly coming to the market. Slow drying process in Brazil is also contributing to the thin arrivals, it said.Bullish sentiment
The first week of the year showed a strong bullish sentiment among the growers despite buyers’ (exporters) absence due to holidays. As a result, export prices jumped to $4,800 and further to $4,990 a tonne, which is an increase of 25 per cent compared to one week before, it said.
According to earlier reports, the global output of cloves is estimated to be lower this year following drop in production in several producing countries.
The output in Sri Lanka where harvesting is to take place this month is estimated to be around 2,000 tonnes as against the earlier projection of 5,000 to 6,000 tonne.
Similarly, in Madagascar also it is estimated to be between 1,500 tonnes and 2,000 tonnes as against its normal production of 12,000 tonnes. In Zanzibar it is estimated to be 800 tonnes where the normal output used to be 4,000 tonnes.
The prices quoted here is $5,400 a tonne. Comoros is reported to have produced only an estimated 600 to 700 tonnes and the entire quantity has been sold out.Indonesian output
In Indonesia, the world’s largest producer of cloves, where harvesting is in March/April, the total production is estimated to be around 20,000 tonnes, which is 20 per cent of its total output.
Indonesia had a bumper crop with a total production of around 80,000 tonnes. The price quoted at present is $4,900 a tonne. Indonesia which uses a substantial quantity of its cloves in the tobacco industry is unlikely to have much for exports, a Bangalore-based cloves dealer told Business Line.
India is a major consumer of cloves with an annual demand of 6,000 to 8,000 tonnes. The indigenous production is estimated at below 2,000 tonnes. The gap in demand and supply is met by imports. The total import of cloves during April – October 2007-08 stood at 3,610 tonnes valued at Rs 44.33 crore against 2,881 tonnes valued at Rs 53.97 crore in the corresponding period of last fiscal. The unit value during the first seven months of the current fiscal was at Rs 122.80 a kg compared to Rs187.35 in the same period in 2006-07.
From The Hindu Business Line...
Kochi, Jan. 11 Export prices of cloves in Brazil have soared by 25 per cent this week following decline in arrivals at the market there.
Latest reports, according to information made available to Business Line by the Brazilian Pepper Trade Board (BPTB), which trades in spices, “the harvest is smaller than originally previewed – between 4,000-5,000 tonnes. We believe that bids below $4,700 would not be considered at this moment”.
New crop of cloves is slowly coming to the market. Slow drying process in Brazil is also contributing to the thin arrivals, it said.Bullish sentiment
The first week of the year showed a strong bullish sentiment among the growers despite buyers’ (exporters) absence due to holidays. As a result, export prices jumped to $4,800 and further to $4,990 a tonne, which is an increase of 25 per cent compared to one week before, it said.
According to earlier reports, the global output of cloves is estimated to be lower this year following drop in production in several producing countries.
The output in Sri Lanka where harvesting is to take place this month is estimated to be around 2,000 tonnes as against the earlier projection of 5,000 to 6,000 tonne.
Similarly, in Madagascar also it is estimated to be between 1,500 tonnes and 2,000 tonnes as against its normal production of 12,000 tonnes. In Zanzibar it is estimated to be 800 tonnes where the normal output used to be 4,000 tonnes.
The prices quoted here is $5,400 a tonne. Comoros is reported to have produced only an estimated 600 to 700 tonnes and the entire quantity has been sold out.Indonesian output
In Indonesia, the world’s largest producer of cloves, where harvesting is in March/April, the total production is estimated to be around 20,000 tonnes, which is 20 per cent of its total output.
Indonesia had a bumper crop with a total production of around 80,000 tonnes. The price quoted at present is $4,900 a tonne. Indonesia which uses a substantial quantity of its cloves in the tobacco industry is unlikely to have much for exports, a Bangalore-based cloves dealer told Business Line.
India is a major consumer of cloves with an annual demand of 6,000 to 8,000 tonnes. The indigenous production is estimated at below 2,000 tonnes. The gap in demand and supply is met by imports. The total import of cloves during April – October 2007-08 stood at 3,610 tonnes valued at Rs 44.33 crore against 2,881 tonnes valued at Rs 53.97 crore in the corresponding period of last fiscal. The unit value during the first seven months of the current fiscal was at Rs 122.80 a kg compared to Rs187.35 in the same period in 2006-07.
From The Hindu Business Line...
Friday, August 03, 2007
BLACK PEPPER STARWAR
This e-mail was received and distributed by ABEP - Brazilian Pepper Exporters Association and shows how the Black Pepper market strugle - The Bulls X The Bears...
----------------------
Dear Nagano San,
I would like to make a clarifications that Indonesian market never been weak in term of locall price. The price down from 4300 to 4100 only because of indonesian currency is weak again usd . In fact locall market price is very steady and strong eventhough the crop is starting coming in. Parity fob still in level usd 4100/mt without profit. Therefore Indonesian exporter must sell above this level in order to get some profit. Furthermore i never saw and heard in Usa market or Europe market Indonesian exporters being agressive to make an offer or try to sell cheap. Indonesian exporters until today dd.2 August very quiet and silent in the usa and europe market. No body really want to do anything due to steady locall market. I am sure the informations that has been spread in Brasil about the weak of Indonesia prices definatelly to mislead market price and in order to press the market in Brasil and this is the only ways to get the brasilian exporters nervous and willing to sell cheap price and foward shipment. Specailly when exporters and other who does not understand the real market situations for supply and demand will be nervous regarding the mislead market informationsof other origin down from whoever has intentions and interest to buy cheap.
For your knowledge right now many peoples use Indian futures market price to attack Indonesian exporters and try to get Indonesian exporters willing to sell cheap and follow the futures market in India. But unfortunatelly it does not work because Indonesian exporters fully awares of this tricks and we are fully awares that export out of India and import out of india since jan -june are still much more import than what they export. This export include the finish product such as oleoresin and ground products. And we fully understand that futures market in India only for peoples want to gamble in the paper . If we are talking Mg1 and try to buy real black pepper from local collector and farmers, definatelly we can not buy any black pepper because their local makret price much higher than exchange price.
If one day there are crazy people who has money and want to gamble and buy alot in futures exchange in India for nearby and later positions and keep holding the positions. I am sure that futures exchange in India will be cheos and price in the exchange will be up to the roof.
Hope this explanations can help you to explained to your exporters freinds in Brasil.
Finally the most important origin must understand the momentum of the pepper prices must be back to basic supply and demand. When the supply is much less than demand we must see the price must go up. Everybody can not run away from these facts.
Rgds
Yuli
----------------------
Dear Nagano San,
I would like to make a clarifications that Indonesian market never been weak in term of locall price. The price down from 4300 to 4100 only because of indonesian currency is weak again usd . In fact locall market price is very steady and strong eventhough the crop is starting coming in. Parity fob still in level usd 4100/mt without profit. Therefore Indonesian exporter must sell above this level in order to get some profit. Furthermore i never saw and heard in Usa market or Europe market Indonesian exporters being agressive to make an offer or try to sell cheap. Indonesian exporters until today dd.2 August very quiet and silent in the usa and europe market. No body really want to do anything due to steady locall market. I am sure the informations that has been spread in Brasil about the weak of Indonesia prices definatelly to mislead market price and in order to press the market in Brasil and this is the only ways to get the brasilian exporters nervous and willing to sell cheap price and foward shipment. Specailly when exporters and other who does not understand the real market situations for supply and demand will be nervous regarding the mislead market informationsof other origin down from whoever has intentions and interest to buy cheap.
For your knowledge right now many peoples use Indian futures market price to attack Indonesian exporters and try to get Indonesian exporters willing to sell cheap and follow the futures market in India. But unfortunatelly it does not work because Indonesian exporters fully awares of this tricks and we are fully awares that export out of India and import out of india since jan -june are still much more import than what they export. This export include the finish product such as oleoresin and ground products. And we fully understand that futures market in India only for peoples want to gamble in the paper . If we are talking Mg1 and try to buy real black pepper from local collector and farmers, definatelly we can not buy any black pepper because their local makret price much higher than exchange price.
If one day there are crazy people who has money and want to gamble and buy alot in futures exchange in India for nearby and later positions and keep holding the positions. I am sure that futures exchange in India will be cheos and price in the exchange will be up to the roof.
Hope this explanations can help you to explained to your exporters freinds in Brasil.
Finally the most important origin must understand the momentum of the pepper prices must be back to basic supply and demand. When the supply is much less than demand we must see the price must go up. Everybody can not run away from these facts.
Rgds
Yuli
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