Pepper market has entered a bearish phase with no demand even at lower prices, traders said. Export demand has dropped substantially and the spot market trading is minimal. Interestingly, most countries are lowering their prices while claiming a crop shortage compared to the previous year.
Prices have dropped by almost Rs 1,500 per quintal in one week at the exchanges in India. Some traders claim that buyers are waiting for the market to bottom-out before covering, others say that, buyers have already covered expecting a squeeze.
?Even though the country is well below other origins, buyers do not want to extend their positions. Carrying excess inventory is not an option. Buyers do not appear convinced that prices will rise in the future,? a leading exporter said. However, Vinayak NV of Karvy Comtrade feels that buyers are adopting a ?wait and watch? attitude and are likely to be active in the market soon. He expects the domestic demand to spur the Indian market and that could give signals to the international buyers. ?Festival demand from north India could make the market firmer in some days. Until then the market will be range bound,? he said. ?The fundamentals are still strong but the technicals are weak. The markets are likely to rally from September,? Faiyaz Hudani, Research Analyst at Kotak Commodity Services said. Reports from producing nations suggest crop shortage that could extend to another year. Brazil and Indonesia are reporting crop shortage but are offering at lower levels. Vietnam has lowered its price while India remains the most economical. Vietnamese pepper has become cheaper and there signs of further easing of the price. Vietnam has about 30,000 tonne of the commodity left in the nation and willingness to sell at lower levels would naturally depress the market.
