The demand is sluggish with most of the buyers stocked and waiting for the dip in the market to buy.
Demand at the moment is very slim. There is a little bit of spot demand but the buyers are very bearish. They expect the price to be lower and are trying to hold off purchasing for as long as possible so that when the arrivals are taking place in February they can buy cheap, Faiyaz Hudani of Kotak Commodity Services said.
The Indian crop is expected by January and the Vietnam crop by February. Jakarta-based International Pepper Community's (IPC) estimates the total global production during 2013 at 3,16,832 tonne and exportable surplus at 3,19,098 tonnes respectively.
Indian production during 2013 is pegged around 55,000 tonne, which is nearly 30% higher than the crop in 2012. The Indian domestic consumption and exports in 2013 has been shown as 43,000 tonne and 25,000 tonne respectively.
Traders feel that the Indian crop would be higher around 60,000-65,000 tonne. So, they are waiting for prices to decline further before picking up stocks, he added. Kotak reported that in the international market Indian black pepper stands $ 7,250-7,350 per tonne for delivery in Europe and $7,550-7,600 per tonne for New York.
Angel Broking said the prices have corrected sharply over the last one month over reports that FMC is probing into complaints against movement in the pepper market.
Better output expectations in the domestic as well as the international markets have also put pressure on prices. Farmers are trying to liquidate their stocks ahead of the commencement of harvesting of the fresh crop, Angel Broking sources added.
There is stock accumulation somewhere in the market. Prices could correct sharply. White pepper prices have declined sharply and black pepper prices are also expected to do so.