Pepper prices that declined during the past two months is expected to revive in the coming weeks on weakening rupee and rising international demand for the commodity, trade sources said.
The prices are expected to touch Rs 14,500-14,650 per quintal in the coming weeks from the current level of Rs 14,000.
According to a report from the commodity research firm Motilal Oswal, Indian rupee that was trading at 39.90 against dollar on April 12 has currently depreciated to 41.70, forcing exporters to buy at spot markets to book more profits. This sudden buying created demand in the spot market, trade sources added.
Due to sluggish demand from the US and Europe during the past one-and-half month, prices declined to $3,550 (f.o.b) from $4,000 per tonne for premium ASTA grade pepper that was predominately produced in India. The price decline was in line with international markets, the world?s largest pepper producer Vietnam in particular.
Local pepper prices in Ho Chi Mi City in Vietnam declined to Rs 122 per kg from Rs 156 in the last 45 days. However, price stability is expected in Vietnam as farmers have made good profits from other crop like coffee that is grown along with pepper. Vietnam farmers are not expected to sell pepper aggressively at these levels, export sources said.
Pepper produced in the Indian fields has a grade of 550 gm per litre with more weight while only the cheaper class light-weight grade is produced by Vietnam.
India?s ASTA grade pepper has a huge demand in the US and Europe, an analyst attached to Motilal Oswal told FE.
Moreover, India?s pepper production for the current season that started with lower carry over stock was expected to be at 45,000 tonne to 50,000 tonne, much lower than 60,000 tonne produced two years ago.