Pepper prices hit new high of R278

Kochi: The pepper market looks bullish, with prices surging ahead on tight supply. Traders and analysts are now expecting prices to cross R300 per kg with global supply straitened as Vietnam holds on to its stocks. Speculative elements in the Indian exchanges are also spicing up the rally.

On Wednesday, the spot price at the physical market stood at R278 per kg against R267 per kg on Monday. The earlier highest price recorded in the country was R265 per kg, in 1999. According to the database of the Kerala Agricultural University, farm level prices were at its highest level during October 1999, having touched R247 per kg.

Faiyaz Hudani at Kotak Commodity Services feels that the market would remain firm on lower supply. “Lower inventory with all producers and traders is a major reason for the firm market. Crop is also on the lower side,” he said.

“Vietnamese are holding back black pepper and quoting aggressively for the white pepper. Prices are very high at the moment,” said P Nandakumar, a trade consultant from Kochi. He feels that the prices would take a cue from the Indonesian crop, due to come in July.

Hudani feels that the crop arrivals in Indonesia and Brazil would not make much difference as reports suggest lower crop in both countries. “Weather conditions in Indonesia re not conducive for pepper and we expect lower crop. Similarly, in Brazil the pepper crop would be less on less acreage,” he said.

K Satheesh Babu of the Agricultural Market Intelligence Centre of the Kerala Agricultural University estimates prices to remain firm and move to new records. “We had forecast some months back that the market would surge ahead in the second part of the year. Prices are likely to cross R300 per kg due to lower availability,” he said. He does not believe that the market would ease on new crop arrivals in Indonesia and Brazil.

(Source: http://www.financialexpress.com/news/pepper-prices-hit-new-high-of-r278/782592/0)