Sham Nair
New Delhi March13, 2010
There is every possibility that India may take a different stand on the price front of black pepper in the global mart as the speculators have been assigned the task of controlling rise in prices in the country except Turmeric . The major reason for this is, one, lowest arrivals of pepper in the terminal market of the country in the century and two, speculators has vowed to keep so called mg-1 trading in the national exchanges below the very limited availability of new crop spot farmgate material.Though the earlier estimates Projected was 55000 mt by Spices Board together with the trade experts and their agronomists now not even 25000 mt is seen as the harvesting season is nearing to the end, the crop is expected to be either too low or farmers just dont want to sell it.


Plucking of pepper vines in the state will be completed within next 2-3 weeks . Some growers of Idukki district told that the crop size would be reduced to 40 per cent this time and according to them Kerala’s total production will be in a range of only 10000 -15000 mt tonne this year.

The Indian market is now highly dependant on the crop of Karnataka where plucking has begun since last 3-4 weeks. The overall Indian crop will be reduced to 25000-30000 tonne from a normal crop size of 50,000-55,000 tonne as per the latest indications.

The current Indian quotes are higher than other origins due to indication about lower output. India quotes MG1 at $2950per tonne (FOB - Kochi) while Vietnam at $2,800-2850 (FOB - HCMC) and Indonesia at $2,850-3,050 (FOB-Panjang).Brazil usd 2650-2700 (FOB Belem)

India is nowhere in the global pepper business. Still the Indian market is high because of its strong domestic demand. which is currently weak because of fear psychosis spread by pepper mafia who are spreading rumours that prices will fall to Rs 110- 115 level because of lack of exports.The country consumes around 40,,000 tonne pepper annually but some experts who sit with microscope viewing pepper activities say it is 50,000 mt which is hard to believe as if India consumes 50,000 mt all the production figures given by various agencies and trade are completely absurd and compiled without any basis.

Coupled with the strong policing of speculators , the heavy drop in production may cause a different line for India on the price front of pepper this year. This will add the country’s export prospects also. Signaling this,imports around 10,0000 mt can be expected in the country by oleoresin manufacturers and grinders in the second, third and fourth quarter of this fiscal It would not be surprising if the total export of India confines to just 10,000 tonne in 2010-2011, said a leading exporter who didnt want us to quote his name. An all time low carry over stock also favours a rally any time from now once the speculators decide to play a reverse game.

This season’s harvesting has began in Vietnam, world’s largest producer of black pepper, and 100,000 -110,000 tonne crop is expected. The exports in January and February were to the tune of 13500 mt and march exports forecasted at 15000 mt , against a monthly global demand of 20,000 mt . But contrary to expectations the prices of the commodity has shot up by usd 250 pmt as the Viet pepper farmers are strictly following Kerala pepper farmers as their role model has already disturbed the sleep of importers in USA and European Union where as the speculators in India have further widened the difference between spot farmgate pepper and so called mg-1 march deliveries in the national exchnages . The Black Gold is continously picked up at 130 per kg by two serious and major players without caring what the mg-1 march delivery prices are.

Sham Nair
BPTB