Pepper market is under pressure due to sluggish demand for the commodity from the euro zone and volatile currencies of many nations. Arrival pressure of crops from Indonesia, Malaysia and Sri Lanka is adding to the sentiments. Traders see the market declining in the near-term due to overbought position of the Arab countries and the currency crisis in Brazil and India.
Faiyaz Hudani of Kotak Commodity Services feels that the Indian market would decline in the near-term and not sustain due to lower exports. ?Fundamentally, Vietnam has plenty of pepper and there is fresh arrival from Malaysia and Indonesia,? he said and added, ?Meanwhile demand is sluggish due to the continuing economic problem in the euro zone and volatile currencies of other nations. Buyers are only buying the minimum volume.? Malaysian pepper is slowly trickling into the global market and pepper from the neighboring country of Indonesia is also projected to reach the market by July.
Angel Broking reports that buying by the local stockists might control prices from falling sharply. However, reports of improved imports of cheap pepper from Vietnam into India and fragile overseas demand may cap sharp rise in the prices. Angel adds that reports of weak demand from the US may also favour bears in the market.
?Prices are under pressure in the global market. In India speculators are driving it up,? Jojan Malayil of Kochi based Bafna Enterprises said. ?Most of the pepper currently traded in India are going to the exchange platform, where the valid stocks are becoming thin. India is likely to buy more Sri Lankan pepper this season. The lack of enough material for local consumption this year will be taken care by the nearby island nation which is expecting a bumper crop of 15,000-18,000 tonne from 2012 crop,? he added.
?Indian market is working on its own and in the hands of few speculators. There is no safety for buyers in the exchanges and mostly its is circular trading,? Kishore Shamji, one of the senior exporter and member of the India Pepper and Spice Trade Association (IPSTA) said. Availability is still low in India and the market may take a different turn, he said. ?Vietnam has sold 60% of their production and will now sell only when prices are good. It is reported that Indonesia and Malaysia have sold in forward some the pepper. So the market may hold steady and depend on the inclination of the sellers to sell at lower levels,? he added.