With global stocks dropping to an all-time low, pepper prices are likely to firm up in the coming days, traders said. Spot availability of good quality pepper is minimal and supply lines are almost dried up, they said. Traders estimate the current pepper stock in the world to be less than 50,000 tonne of which less than 40% is expected to come to the market. Farmers tend to hold some stocks for emergencies, which is unlikely to come to the market in the short-term.
Anand Kishore of Kishore Spices said that the selling strategy of Vietnam and the lower production in India, Indonesia and Brazil caught buyers napping. Buyers were depending on Vietnam to support the market and a lower availability has affected the market. ?A deficit in China has led to increased border trade for Vietnam and the conversion into white pepper has diminished the stock of black pepper. About 22,000 tonne were converted to white pepper and almost 10,000 tonne traded with China.? He estimates that the global shortage compared to previous years at 45,000 tonne to 40,000 tonne. Anand perceives a firm market in the short term. ?Crop arrivals have been delayed in India and the Vietnam crop is also expected a little later,? he added.
The US and European inventory is also seen at the lowest with one trader estimating it to be well below one month?s necessity. ?Buyers were waiting for the prices to stabilise and were taking cues from the Indian commodity exchanges,? a trader told FE. However, in the real market, sellers are reluctant to sell MG1 pepper at the exchange rates. Vietnam has very little of pepper left and India has a stable and increasing domestic demand. Traders expect the fundamentals to play a proactive role in the coming months with international pepper community estimating lower production and availability of pepper.