Indian Pepper remains outpriced but imports surge
2010/08/16
Kochi/16 th August 2010
Indian Black pepper continue to remain out priced in the international market thanks to the heavy consumption in the domestic market of the spice and infact the country barely produces what it needs and there are no exportable surplus this year according to veterans in the trade. "We expected this scenario earlier this year and began focussing our attention on the domestic front rather than exports" commented the head of a leading Black Pepper exporter who didnt want to divulge his name.
According to the statistics of Chamber of Commerce the country has exported 5,500 mt of the spice in the first four months of the financial year but the import figures were quite alarming which was close to 7,500 mt which means in short, the exporters are not using indian origin Black pepper at all, allowing the domestic prices not to flare up beyond a certain level.
"Although the country has imported 7500 mt in the first four months and more to come till the end of the year I do not think all the pepper we imported are heavy berries used by the grinding industry and possibly 40% of it may be by the grinding industry and rest by the oil and oleoresin industry" said Mr Jojan Malayil of Bafna Enterprises the countrys largest exporter of Indian origin Black pepper. "But the alarming side of it is that we are jobless for almost 9 months in an year and are at the mercy of operators in the national Commodity Exchanges and, new generation experts who give buy and sell calls based on charts" he added. The genuine traditional pepper guys are out of the system said a dealer from Adimaly who is uno of the Kerala pepper supply chain.
With IPC becoming a laughing stock in the past years the new Secretary General is on damage control according to our informations and is trying to put a stop to the nonsensical statistics on carry over, production and exports and balance available crop in producing origins especially in Indonesia and Vietnam who have been misleading the pepper people since last 3 years .
With harvests getting to its peak in Indonesia the prices from there has been dropped to usd 3800 fob Panjang and Brazil where harvest is almost round the corner in the main producing area Para these countries are vying for export orders as cash has become King . The prices from Brazil varies from shipper to shipper and agents from agents. The european claims they have offers of ASTA at USD 3900 fob Belem for August/September shipments the USA Brokers say the lowest they have is usd 4000 pmt but the main broker in Brazil says its all nonesense and may be you can buy at usd 4000 fob Belem but there is no guarantee that it will be shipped if the market is not in the favour of the shipper and one should take nomianl prices of ASTA at usd 4100 pmt fob Belem although there are no buyers at this Juncture.
Mother India the controller and wave setter of prices in the Globe is currently quoting usd 4250 pmt fob cochin for Mg 1 ASTA where as Indonesian ASTA is finding it difficult to find a home today at usd 3800 fob Panjang. Vietnam 500 g/l prices remained strady at usd 3700 pmt fob HCMC during the week and same is the case with ASTA prices which was hovering around usd 4200 pmt fob HCMC. With Bears pressing the markets down in India based on international news, the Indian market is somewhat holding ground with its huge domestic requirement and prices seems to settle between the Rs 180- 185 range for the next four weeks.
Sham Nair
Monday, August 16, 2010
Sunday, August 08, 2010
Pepper to remain flat till mid September
Dear Editor,
London 09th August 2010
With Summer holidays underway in Europe and USA where buyers are away on annual vaccation Black and White pepper which are currently in "Bear Hug" will continue to remain so as the cheer leader India lost steam without finding buyers for pepper at higher levels. Speculators who bought pepper thinking that it was going to hit lifetime high prices like all other commodities were pressed to the wall With Vietnam and Indonesia once again misleading carryforward and production figures for 2010 and was undercutting Indian prices and getting most of the sales for even winter period which was a last resort for indian exporters who are engaged in exporting genuine and pure Malabar Black pepper.Brazil and Indonesia pushed for sales and lowered their price tags below usd 4000 fob Belem/ Panjang couldnt attract many buyers as exporters there for vying sales and some of them even sold below usd 3900 belam for immediate cash and since arrivals peaked up in Lampong exporters were even offering at usd 3925 pmt fob but only for August and september shipments,
India the country which claims to have the highest domestic consumption of 40000- 45000 pmt seems to have dried up available stocks of farmgate as even after prices hitting Indian Rupees 210-215 per kg there was a big reluctance to sell which obviously means two things one is the available stocks are over and the other is the greed continues as all were praying for Inr 200 for a decade and when it came none wanted to sell. The country is still said to be carrying one crop under their bed and not willing to release it as current levels do not seem to be interesting. Meanwhile the monsoon showers has been pretty good so far and the 2011 crop looks promising at this time but it is stilll early as only by October we will get a clear picture. Indonesia the mystery place continue to be the worlds biggest ASTA pepper supplier for 2010 with almost all American orders under their belt and some exporters have quitely sold till the end of the year when indian futures hit the decade high of Rs 220 per kg in the month of july.
Vietnam who projected their exportable surplus for 2010 at 90000 mt have already exported 85000 mt through official custom route and 10000 mt through cross border trades still has 25000 mt according to pessimist exporters and 35000 mt according to optimists but God only knows the real truth and one has to wait till Jan 10 2011 to know the real story.
Sri Lanka the indian neighbour where the new crop is underway are soliciting orders at usd 3700 cnf cochin I(Indian rupees 170.77 per kg ) is still not getting buyers as the indian exporters are heard sitting on a pile of pepper finding no place to sell other than the national commodity exchanges which seems to have depressed the sentiments of the Bulls and markets have fallen to Bear Hug
Emmar Jay for Peppertrade Blog
London 09th August 2010
With Summer holidays underway in Europe and USA where buyers are away on annual vaccation Black and White pepper which are currently in "Bear Hug" will continue to remain so as the cheer leader India lost steam without finding buyers for pepper at higher levels. Speculators who bought pepper thinking that it was going to hit lifetime high prices like all other commodities were pressed to the wall With Vietnam and Indonesia once again misleading carryforward and production figures for 2010 and was undercutting Indian prices and getting most of the sales for even winter period which was a last resort for indian exporters who are engaged in exporting genuine and pure Malabar Black pepper.Brazil and Indonesia pushed for sales and lowered their price tags below usd 4000 fob Belem/ Panjang couldnt attract many buyers as exporters there for vying sales and some of them even sold below usd 3900 belam for immediate cash and since arrivals peaked up in Lampong exporters were even offering at usd 3925 pmt fob but only for August and september shipments,
India the country which claims to have the highest domestic consumption of 40000- 45000 pmt seems to have dried up available stocks of farmgate as even after prices hitting Indian Rupees 210-215 per kg there was a big reluctance to sell which obviously means two things one is the available stocks are over and the other is the greed continues as all were praying for Inr 200 for a decade and when it came none wanted to sell. The country is still said to be carrying one crop under their bed and not willing to release it as current levels do not seem to be interesting. Meanwhile the monsoon showers has been pretty good so far and the 2011 crop looks promising at this time but it is stilll early as only by October we will get a clear picture. Indonesia the mystery place continue to be the worlds biggest ASTA pepper supplier for 2010 with almost all American orders under their belt and some exporters have quitely sold till the end of the year when indian futures hit the decade high of Rs 220 per kg in the month of july.
Vietnam who projected their exportable surplus for 2010 at 90000 mt have already exported 85000 mt through official custom route and 10000 mt through cross border trades still has 25000 mt according to pessimist exporters and 35000 mt according to optimists but God only knows the real truth and one has to wait till Jan 10 2011 to know the real story.
Sri Lanka the indian neighbour where the new crop is underway are soliciting orders at usd 3700 cnf cochin I(Indian rupees 170.77 per kg ) is still not getting buyers as the indian exporters are heard sitting on a pile of pepper finding no place to sell other than the national commodity exchanges which seems to have depressed the sentiments of the Bulls and markets have fallen to Bear Hug
Emmar Jay for Peppertrade Blog
Wednesday, August 04, 2010
Speculation, poor physical market understanding lead to volatility in commodities
THIS ARTICLE DOES NOT RELATE TO PEPPER ITSELF BUT I FIND IT SOMEHOW USEFULL...
Editor
Kunal Bose / Aug 03, 2010, 00:42
It is not anybody’s case that the financial commodities markets are operating in an ideal environment of transparency and regulation. In fact over the years, commodity exchanges in London, New York and Chicago have been pressured to exercise increasingly rigorous control on trade and improve transparency. Exchanges by their very nature are to face waves of speculation. But controls are generally well in place to avoid undermining of markets.
Even then concerns are expressed from time about speculation money routed through hedge funds sending prices of commodities, particularly oil and gas and iron ore on roller coaster rides. The speculative phenomenon has been much in evidence in the last two years. It no doubt has got much to do with the challenges faced by governments cutting across stages of development of the countries they represent – the developed world besides, both Beijing and New Delhi launched major stimulus programmes and any rollback is now to be done judiciously – to meet the challenges of 2008-09 recession. At the micro level, the almost felled industries are to first put their house in order and then return to the growth path.
But surprisingly for all the imperfections of the commodities markets, government attention invariably turns to the financial segment where because of very low interest rates speculators are finding it profitable to keep industrial commodities in warehouses.
To give one example, funds control over 80 per cent of about 4.5 million tonnes of aluminium in London Metal Exchange warehouses. Speculation is the reason why the funds are these days particularly active in commodities. No doubt aluminium and copper will have fared worse had not funds snapped up large volumes of metals in anticipation of future gains.
Moves by funds, call that speculation if you want, leave an impact on the market in the short term. Javier Blas writes in Financial Times that “over the medium term, prices in commodity markets respond largely to murky supply, demand and inventories signals. And here is the problem that policymakers are ignoring to the perils of the world economy.”
Not only does Blas point to the common ignorance of physical commodities markets, but more significantly laments the fact of our “worsening” understanding of these. One reason of our poor appreciation of the physical market is the rapid rise of China, South Korea and India as users (and producers too) of bulk commodities, while, as Blas points out, “the statistical and policymaking system was put in place in the 1960s-1970s” when such countries were not players of much significance.
Unfortunately, the system has not been sufficiently radicalised since to truthfully reflect the shift in production and consumption focus from developed to emerging nations. Growth in industrial commodities has been mostly in the East as high costs of labour and energy and also increasingly rigid environmental laws have caused shrinkages in metals production capacities in the West.
While there has been a major shift in action to the developing world since the mid 1980s as far as industrial commodities are concerned, the agencies to collect and analyse demand, supply and stocks data are still to be appropriately geared to precisely monitor movements there.
In the process we are left with an imperfect understanding of the physical commodities markets and the governments rather inexplicably are staying focussed on financial side of commodities markets. The International Organisation of Securities Commission has now said in a report on ‘Commodities Futures Markets,’ prepared for G20 that the “relative imbalance in the degree of transparency between financial (commodities) markets versus physical markets – which are, ironically, by far, the most transparent markets –obscures analysis of the many complex inputs into commodity prices.”
The play in commodities financial markets cannot but be based on price movements and demand and supply at a particular point in the physical market. However, much to general dismay, tracking of information in the latter remains imperfect. The blame for this is to be laid largely at the door of concerned industries. Blas, therefore, ruefully says, “Industry lacks enthusiasm to improve statistical flow as companies see their intelligence as proprietary information, key to their trading.”
He further makes the point that some of the more than 25 international organisations tracking physical commodities markets are just “hopeless.” And why is there not a world organisation to collect and analyse prices and supply, of now, as volatile a commodity as iron ore, the principal ingredient of steel making? To give an idea of volatility of this mineral, its prices rose by nearly 50 per cent in the first five months of 2010. But as that squeezed the margins of steelmakers who could not pass on the incremental cost to the buyers of the metal, they started destocking iron ore already with them.
Driving down stocks is much in evidence in China, the world’s largest importer of iron ore. The result is, spot prices are falling. In the process, the Baltic Dry Index, which measures chartering rates of large and very large ships is also taking a hit. The world needs to have a better understanding of the physical market.
-------------------------------
Editor
Kunal Bose / Aug 03, 2010, 00:42
It is not anybody’s case that the financial commodities markets are operating in an ideal environment of transparency and regulation. In fact over the years, commodity exchanges in London, New York and Chicago have been pressured to exercise increasingly rigorous control on trade and improve transparency. Exchanges by their very nature are to face waves of speculation. But controls are generally well in place to avoid undermining of markets.
Even then concerns are expressed from time about speculation money routed through hedge funds sending prices of commodities, particularly oil and gas and iron ore on roller coaster rides. The speculative phenomenon has been much in evidence in the last two years. It no doubt has got much to do with the challenges faced by governments cutting across stages of development of the countries they represent – the developed world besides, both Beijing and New Delhi launched major stimulus programmes and any rollback is now to be done judiciously – to meet the challenges of 2008-09 recession. At the micro level, the almost felled industries are to first put their house in order and then return to the growth path.
But surprisingly for all the imperfections of the commodities markets, government attention invariably turns to the financial segment where because of very low interest rates speculators are finding it profitable to keep industrial commodities in warehouses.
To give one example, funds control over 80 per cent of about 4.5 million tonnes of aluminium in London Metal Exchange warehouses. Speculation is the reason why the funds are these days particularly active in commodities. No doubt aluminium and copper will have fared worse had not funds snapped up large volumes of metals in anticipation of future gains.
Moves by funds, call that speculation if you want, leave an impact on the market in the short term. Javier Blas writes in Financial Times that “over the medium term, prices in commodity markets respond largely to murky supply, demand and inventories signals. And here is the problem that policymakers are ignoring to the perils of the world economy.”
Not only does Blas point to the common ignorance of physical commodities markets, but more significantly laments the fact of our “worsening” understanding of these. One reason of our poor appreciation of the physical market is the rapid rise of China, South Korea and India as users (and producers too) of bulk commodities, while, as Blas points out, “the statistical and policymaking system was put in place in the 1960s-1970s” when such countries were not players of much significance.
Unfortunately, the system has not been sufficiently radicalised since to truthfully reflect the shift in production and consumption focus from developed to emerging nations. Growth in industrial commodities has been mostly in the East as high costs of labour and energy and also increasingly rigid environmental laws have caused shrinkages in metals production capacities in the West.
While there has been a major shift in action to the developing world since the mid 1980s as far as industrial commodities are concerned, the agencies to collect and analyse demand, supply and stocks data are still to be appropriately geared to precisely monitor movements there.
In the process we are left with an imperfect understanding of the physical commodities markets and the governments rather inexplicably are staying focussed on financial side of commodities markets. The International Organisation of Securities Commission has now said in a report on ‘Commodities Futures Markets,’ prepared for G20 that the “relative imbalance in the degree of transparency between financial (commodities) markets versus physical markets – which are, ironically, by far, the most transparent markets –obscures analysis of the many complex inputs into commodity prices.”
The play in commodities financial markets cannot but be based on price movements and demand and supply at a particular point in the physical market. However, much to general dismay, tracking of information in the latter remains imperfect. The blame for this is to be laid largely at the door of concerned industries. Blas, therefore, ruefully says, “Industry lacks enthusiasm to improve statistical flow as companies see their intelligence as proprietary information, key to their trading.”
He further makes the point that some of the more than 25 international organisations tracking physical commodities markets are just “hopeless.” And why is there not a world organisation to collect and analyse prices and supply, of now, as volatile a commodity as iron ore, the principal ingredient of steel making? To give an idea of volatility of this mineral, its prices rose by nearly 50 per cent in the first five months of 2010. But as that squeezed the margins of steelmakers who could not pass on the incremental cost to the buyers of the metal, they started destocking iron ore already with them.
Driving down stocks is much in evidence in China, the world’s largest importer of iron ore. The result is, spot prices are falling. In the process, the Baltic Dry Index, which measures chartering rates of large and very large ships is also taking a hit. The world needs to have a better understanding of the physical market.
-------------------------------
Friday, July 30, 2010
Indonesia
Dear Editor,
30/07
Indonesia which until three weeks ago, has been offering black pepper at usd 4500- 4600 a tonne, has suddenly turned out to be the cheapest source of this spice in the world. Thanks to the recent melt-down in its domestic prices, which happened as the wotlds largest oprerator of Black pepper who was buying the farmgrade pepper also competing local exporters withdrew from the market and indeed has become an agressive seller. The harvest is coming to an end contrary to the news of Indian media that the crops in Indonesia is delayed commented one of the top domestic exporter.Though the price crash comes as a boon to exporters, they are, however, cautious about responding to any new contracts for string shipments till the end of the year and are more comfortable in working for nearby shipments and offers are made at usd 4200-4225 pmt cfc 1.5 Ny . It is estimated by the agricultural department that nearly 25,000 tonnes of black pepper would be harvested in the current year although a section feels the crop is only 15000 mt and another section feels the crop is 35000 mt.
The Indian Black Pepper Futures is dominated by bull operators who have made the prices to usd 4650 pmt fob cochin for the Indian variety Mg-1 asta grade making it the worlds most expensive pepper which was well in line with other producing origins till four weeks ago.Thanks to the huge demand by the domestic operators after the prices crossing above Rs 200 per kg in the producing states kerala and karnataka .You can buy Black pepper much cheaper than what it is quoted in Cochin said an exporter.
Though Indian pepper in value-added forms has great demand in the world market, exporters of such products are sourcing their requirements from Indonesia since last ten days as the landed cost of this pepper in Kochi is only Rs 190/-kg and the neighbouring island nations pepper landed cost in kochi is only Rs 185/-per kg., said a Kochi-based exporter. Attracted by lower price, Indian processors have booked about 500-650 tonnes of pepper from Indonesia in the last week. This has surprised the bull operators as some exporters who were heavily long in the indian exchanges physical stocks are likely to deliver it back to the fellow citizens as they have got replacement Rs 25/kg below indian Black pepper for their value addition. With declining demand for the spice from abroad, and increasing prices domestically India has become a net importer of the spice in the first quarter of this financial year according to the statsistics made available by the Cochin Chamber of commerce and industry.
----------------------------------------
30/07
Indonesia which until three weeks ago, has been offering black pepper at usd 4500- 4600 a tonne, has suddenly turned out to be the cheapest source of this spice in the world. Thanks to the recent melt-down in its domestic prices, which happened as the wotlds largest oprerator of Black pepper who was buying the farmgrade pepper also competing local exporters withdrew from the market and indeed has become an agressive seller. The harvest is coming to an end contrary to the news of Indian media that the crops in Indonesia is delayed commented one of the top domestic exporter.Though the price crash comes as a boon to exporters, they are, however, cautious about responding to any new contracts for string shipments till the end of the year and are more comfortable in working for nearby shipments and offers are made at usd 4200-4225 pmt cfc 1.5 Ny . It is estimated by the agricultural department that nearly 25,000 tonnes of black pepper would be harvested in the current year although a section feels the crop is only 15000 mt and another section feels the crop is 35000 mt.
The Indian Black Pepper Futures is dominated by bull operators who have made the prices to usd 4650 pmt fob cochin for the Indian variety Mg-1 asta grade making it the worlds most expensive pepper which was well in line with other producing origins till four weeks ago.Thanks to the huge demand by the domestic operators after the prices crossing above Rs 200 per kg in the producing states kerala and karnataka .You can buy Black pepper much cheaper than what it is quoted in Cochin said an exporter.
Though Indian pepper in value-added forms has great demand in the world market, exporters of such products are sourcing their requirements from Indonesia since last ten days as the landed cost of this pepper in Kochi is only Rs 190/-kg and the neighbouring island nations pepper landed cost in kochi is only Rs 185/-per kg., said a Kochi-based exporter. Attracted by lower price, Indian processors have booked about 500-650 tonnes of pepper from Indonesia in the last week. This has surprised the bull operators as some exporters who were heavily long in the indian exchanges physical stocks are likely to deliver it back to the fellow citizens as they have got replacement Rs 25/kg below indian Black pepper for their value addition. With declining demand for the spice from abroad, and increasing prices domestically India has become a net importer of the spice in the first quarter of this financial year according to the statsistics made available by the Cochin Chamber of commerce and industry.
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Monday, July 26, 2010
INDIAN PEPPER FUTURES LIKELY TO DROP ANOTHER RS15 PER KG IN TANDEM WITH INTERNATIONAL PEPPER PRICES
The Indian Pepper prices which is currently ruling highest in the world because of its huge domestic consumption is likely to drop heavily from the second week of August according to the indications we receive from overseas markets. The neighbouring island nation whose new crop is ready has become agressive and offering its 525 g/l variety cnf cochin for august shipment at usd 3.950 pkg (Rs 185.49 per kg ) without finding buyers and same is the case with Indonesian new crop which is offered in all directions and from all shippers and resellers at usd 4.30 per kg cfc 1.5 (Rs 201.9 Per kg )New york delivered. Brazil very quitely accepting some deals for august/sept shipments on special payment terms by farmers /exporters who require cash at usd 4.20 per kg. Indian mg1 asta prices are currently the most expensive pepper quoted cfc 1.5 ny at usd 4.850 per kg cfc 1.5 Ny ( Rs 227.73 per kg ) With indian pepper futures dropping almost Rs 200 per ton from last weeks high the hunger for pepper has subsided from north indian speculative traders and they have become sellers to book their lossess in the main northern indian markets Delhi and jaipur. I do not think the current higher prices can sustain for long if no export demands coming to the country and since exporters have physical stocks which are already hedged in the exchange platform might become physical deliveries if the expected overseas demand does not show up; and this scenario will make available more stocks in the system and markets can drop substantially from current levels and move down to 190-192 per kg for nearby August deliveries according to expert analysts in the national commodity exchanges.
Saturday, July 10, 2010
Global Pepper availability seen in Deep Red although Production/Demand Mismatch Minimal
Guestimates of International Pepper community put production at 310000 mt of both Black and white pepper for the year 2010 but where as realistically according to the agronomists of leading spice companies in the world the production was some where in the area of minimum 360000 mt against a requirement of 216000 mt by importing countries and home consumption from origin countries to the tune of 90000 mt. Basically there was no mismatch between demand vs supply figures but what went wrong was the miscalculations in assessing availability of the spice when demand was there. Even today many importers feel that asian economy is not faring well and farming community will have to sell their produce when the harvest comes and they could do nothing but to sell, but in reality the farming community has become so rich and they have no rush to sell and the best example was seen when the new crop in india came this year when the farmers decided not to sell it as they felt the current year they will see Rs 200/kg for sure which they have been anticipating for the last two years and decided to hold back.The Value added industry went in for record imports in the first half of the year so that it will keep them going till October as they are not supposed to keep the imported pepper in the country for not more than 120 days. But many has exhausted their stocks and imports totally become unviable and the pressure on indian stocks mounting with many grinders putting on their hands on the exchange stocks which can make things more worse if the sellers do not honour their commitments by not giving physical deliveries.
Vietnam the worlds largest producer and exporter has put 85000 mt across seven seas of the world, and according to VIetnasm Pepper Association the balance available from that country is only 5000 mt according to the production estimates of 90000 mt they furnished with International pepper community (IPC) But the actual production figures according to trusted agronomists who were putting the figures very correctly since 2002 the production of pepper in the country is in the ranger of AROUND 120000 - 125000mt and carry over stocks of 10000 mt and imports of 5000 mt which will make a smooth sailing to 2011 was what the importing countries thought and what happened today is literal hoarding of the commodity by the worlds largest producer and exporter of the spice to the surprise of many importing countries.
Indonesia who were ruling the Black ASTA grade pepper Biz for quite sometime now , thought that they can do it for one more year and were undercutting Vietnam and Indian ASTA pepper prices by usd 200 pmt for no reason are now caught at the wrong foot with the worlds largest pepper importer and pepper trader very active in Panjang buying directly the aslan( farmgate) grade there by making the life of major exporters difficult and quite unhappy.
Malayasia sevicing their traditional markets Japan, Korea and Taiwan with their small crop has also been importing quite a bit from Vietnam in the first half of the year to avoid supply crunch in their local market.Their prices have been totally out of line for the rest of the world other than Japan, Korea and Taiwan who predominetly using sarawak pepper and they didnt want to change the flavour profile for a few hundred dollars.
India the origin which consumes almost 75% of its production internally for home consumption and the land where they have legalised online Casino by the name National Agri Commodity ExchangesNational multi commodity exchanges was the leader in bringng up prices from usd 2850 pmt fob for asta grade in March to the current usd 4150 pmt fob levels has been behaving pretty decent this week even when Vietnam increased its prices to usd 4650 fob levels hcmc for the asta grade and 500 grams/litre prices to usd 4050 pmt fob levels and Indonesia raising their prices from usd 3700 fob panjang levels to 4100 pmt fob panjang levels on friday and Brazil moving up as high as usd 4200 fob Belem levels with buyers paying up even high as usd 4050- 4100 fob belem for august/september shipments.
The USA market which is the worlds largest single importer has been in a total denail mood has finally showed their faces on Friday and picked up all cheap priced offers from all origins and resellers as they have realised that the situation is getting worse and it will be much worse in the coming weeks and better late than never as the next big crop is seven months away and the origins will continue to squeeze as most of the pepper is still with farmers and not intermediaries.
-------------------------------------------------
Vietnam the worlds largest producer and exporter has put 85000 mt across seven seas of the world, and according to VIetnasm Pepper Association the balance available from that country is only 5000 mt according to the production estimates of 90000 mt they furnished with International pepper community (IPC) But the actual production figures according to trusted agronomists who were putting the figures very correctly since 2002 the production of pepper in the country is in the ranger of AROUND 120000 - 125000mt and carry over stocks of 10000 mt and imports of 5000 mt which will make a smooth sailing to 2011 was what the importing countries thought and what happened today is literal hoarding of the commodity by the worlds largest producer and exporter of the spice to the surprise of many importing countries.
Indonesia who were ruling the Black ASTA grade pepper Biz for quite sometime now , thought that they can do it for one more year and were undercutting Vietnam and Indian ASTA pepper prices by usd 200 pmt for no reason are now caught at the wrong foot with the worlds largest pepper importer and pepper trader very active in Panjang buying directly the aslan( farmgate) grade there by making the life of major exporters difficult and quite unhappy.
Malayasia sevicing their traditional markets Japan, Korea and Taiwan with their small crop has also been importing quite a bit from Vietnam in the first half of the year to avoid supply crunch in their local market.Their prices have been totally out of line for the rest of the world other than Japan, Korea and Taiwan who predominetly using sarawak pepper and they didnt want to change the flavour profile for a few hundred dollars.
India the origin which consumes almost 75% of its production internally for home consumption and the land where they have legalised online Casino by the name National Agri Commodity ExchangesNational multi commodity exchanges was the leader in bringng up prices from usd 2850 pmt fob for asta grade in March to the current usd 4150 pmt fob levels has been behaving pretty decent this week even when Vietnam increased its prices to usd 4650 fob levels hcmc for the asta grade and 500 grams/litre prices to usd 4050 pmt fob levels and Indonesia raising their prices from usd 3700 fob panjang levels to 4100 pmt fob panjang levels on friday and Brazil moving up as high as usd 4200 fob Belem levels with buyers paying up even high as usd 4050- 4100 fob belem for august/september shipments.
The USA market which is the worlds largest single importer has been in a total denail mood has finally showed their faces on Friday and picked up all cheap priced offers from all origins and resellers as they have realised that the situation is getting worse and it will be much worse in the coming weeks and better late than never as the next big crop is seven months away and the origins will continue to squeeze as most of the pepper is still with farmers and not intermediaries.
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Monday, May 03, 2010
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