Pepper prices are likely to remain steady because of limited and delayed arrivals of the new crop in India and Vietnam. Traders said normally, during this part of the year, arrival pressure from India and Vietnam pull down prices allowing big buyers to procure large volumes. However, lower supply from India and almost nil supply of black pepper from Vietnam have left buyers with no option but to wait for higher arrivals.
?Erratic weather in most parts of the world has left pepper producing countries with lower production. Availability in India is very low and Vietnam is only offering March shipment,? P Nandakumar, a trade consultant from Kochi said. Heavy rains in most southern states which produce pepper in India has delayed the harvest that normally starts in December and extends to March.
Kishore Shamji, one of the senior exporter and member of India Pepper and Spice Trade Association (IPSTA) concurs that the market would be steady and not ease due to arrival pressure.
?The market will remain steady in the short-term. We don?t expect pressure to build up as the pepper production is just sufficient for our needs,? he said. ?Demand should come as buyers are pushing back their consumption in anticipation that prices would decline, he said adding that US has bought lesser pepper last year than the normal volume. He expects supply to improve by February.
Nandakumar said that the supply situation is very tight with Vietnam not offering January and February shipment of black pepper.
?US normally buys 6,000-10,000 tonne of pepper during January with the new crop from big two producers coming to the market,? he said. Indonesia is the only country apart from India, which is offering immediate shipment. Brazil and Malaysia are not there in the market, he added.
According to estimate from the Jakarta-based International Pepper Community (IPC), in 2010 carry-forward stocks in producing countries is projected to decline by nearly 6 % to 95,442 tonne. The global production is also estimated to be down by 2% in 2011 at 3,09,952 tonne against 3,16,380 tonne in 2010 and 3,18,662 tonne in 2009.