VPA FEB 01, 2010
There is every possibility that India may take a different stand on the price front of black pepper in the global market and most likely to decouple with international market in 2010.. The major reason for this is Pepper cultivation has become economically not viable for the farmers because of low productivity and higher wages which makes some farmers even abandoning the pepper harvest for the current season. Although some up country dealers were discussing about delayed crop we found out that certain pockets have already finished harvesting and farmers have dried the crop and stored it already anticipating a better return for their produce in 2010. This will badly affect the country’s export prospects also and we wonder whether we will be even able to export even 50% of the produce in the current year said Mr Jojan Malayil of Bafna Enterprises, the countrys largest exporter of indian Black pepper and Vice Chairman of All India Spice Exporters Forum.But over dependence on vietnam by all importers will turnaround things and india will get a chance to export some 5000 mt of mg-1 this year he added.

Plucking of pepper vines is over in the southern districts of the state and this will be completed within next 3-4 weeks in the High ranges. Some growers of Idukki district told that the crop size would be reduced considerably this time. Kerala’s total production will be in a range of 14,000-16,000 tonne this year.Since the prices of all other spices like Nutmegs, Cardamom, Ginger, Turmeric are currently staying at its peak besides Rubber the main depenable cultivation in Kerala where pepper is not cultivated widely but as an intercrop and pepper corns can be stored for years where as other produces cannot also prompt farmers to hold back their produce .

The Indian market is now highly dependant on the crop of Karnataka where plucking will begin within next 4-5 weeks. The overall Indian crop will be reduced to 45000 tonne from a normal crop size of 50,000-55,000 tonne as per the latest estimates.

The current Indian quotes are higher than other origins . India quotes MG1 at $3,100 per tonne (FOB - Kochi) while Vietnam at $2950- 3000(FOB - HCMC) but shipments only after February 22 and Indonesia at $2,900-3000 (FOB-Panjang).and Brazil at $2,800 (FOB- Belem).

The current lowest tag is from Indonesia now in the MLV ASTA club who have taken a lions share of ASTA Black Pepper exports in 2009 is still willing to wheel and deal at lower prices hence , Indias prospects of exports for 2010 is very dim as it does not attract importers across the world. . Indian market is high because of its strong domestic demand. and the country consumes around 35,000 - 40000 tonne pepper annually.and is the biggest producing consumer of pepper in the world. Vietnam the largest producers consumption is only less than 5000 mt from an average production of 100000 in the last 3 years.

It would not be surprising if the total export of India confines to just 10,000 tonne in 2009-10, of Indian origin pepper said Jojan Malayil, vice chairman of All India Spices Exporters Forum (AISEF). An all time low carry over stock also favours a rather strong bull mode on the domestic front.but currently supressed by irregulated commodity exchange players.

This season’s harvesting has begun in Vietnam, world’s largest producer of black pepper, and 100,000 -110,000 tonne crop is expected. Once supply is stabilised it is likely that Vietnam may reduce their tags further is what importers feel across the globe but if Vietnam resort to staggered selling this year they can dictate the price of pepper this year and importers will have to look at india for Mg-1 asta sterilised pepper in the coming weeks .

From VPA...