Pepper prices to ease on arrivals

The pepper market could see some downward bias in the coming days with more pepper arriving from the hinterlands as harvest progress. Globally too, the market is seen easing with Vietnam devaluing its currency and increasing its production estimates for the year.

"Availability of Indian pepper has improved with harvesting progressing in hill ranges," Jojan Malayil Bafna Enterprises said.

Harvesting has been delayed in India due to untimely rains and shifts in climatic pattern. Arrival of fresh pepper normally starts in Kerala from November and extends to March. Normally, during this part of the year arrival pressure from India and Vietnam pressurise the market allowing big buyers to procure large volumes.

Jojan says that the Indian market would see some downward correction on global cues but he does not expect the pressure to be strong in the Indian context due to the robust demand and empty pipelines. "The trade dynamics has changed in pepper".

"Arrival pressure seen normally during the time when Vietnam and Indian pepper comes to the market will not occur," he noted. The buyers are also short and they need to buy as they are maintaining very low inventory, he said.

K Satheesh Babu of the Agricultural Market Intelligence Centre (AMIC) of Kerala Agricultural University estimates the prices to soften a bit as arrivals gather speed but expects the market to rally higher towards the later part of the year due to lower supply. "With limited physical inventory in the importing countries, and a precariously low carry over stock, the prices are expected to become volatile this crop season," he added.

The demand for pepper is likely to keep the domestic market higher than the global market, traders said. Indian demand is seen robust and supply has declined. According to Jakarta-based International Pepper Community (IPC), India is estimated to import 13,250 tonne of the commodity and export nearly 19,000 tonne during 2011. It still remains the largest consumer of pepper from the producing countries with domestic consumption estimated at 45,000 tonne.

(Source: http://news.in.msn.com/business/article.aspx?cp-documentid=4917485)