Pepper market is likely to ease further with Vietnam showing willingness to sell at lower levels due to currency problem, traders said. This is compounded by the inventory of major buyers who have covered their position for several months. “The situation in Vietnam is confusing and concerning with the currency fluctuating wildly. Vietnam has enough stocks left to depress the global market in case of panic selling,? a leading trader from the terminal market of Kochi told FE.
Another trader told FE that the US has covered enough and more compared to the previous season. ?US buyers have brought 30% more pepper from January to May 2008 as against last year. In April alone, they brought large volumes from Indonesia,? he added. Meanwhile Indian buyers have also brought small quantities from Vietnam, traders said.
Faiyaz Hudani at Kotak Commodity Services says that demand has dipped in the international markets with major buyers already long and some preferring to wait to buy at lower levels. ?Arrival pressure from Indonesia and Brazil which usually comes in July is likely to ease the market further,? he added.
?If Brazil and Indonesia decides to hold, the market may firm up. It is reported that Brazil has a good crop this year but the domestic consumption is also high,? Faiyaz said.
However, Nalini Rao of Angel Broking believes that the market has seen its low and should bounce back in the coming days with active buying from Europe and Middle East. ML Parekh, a leading trader from Kochi who says that the fundamentals of global shortage should firm up the market in the coming days, supports her. ?India does not have much stock and the arrivals have diminished to trickles. Globally the supply is shorter and the market should respond to that very soon,? he added.