Pepper Drops On Reduced Off Takes.

Spot pepper prices as well as Futures traded lower on account of reduced offtakes and settled 0.47% and 1.99% w-w. However, reports that Vietnam; the major producer of the commodity not selling its produce will control pepper prices from falling sharply. In Indonesia, international pepper prices rose by around 3% last week due to lower availability. India pepper prices are quoting around $6,400-$6,700/tonne.(source: agriwatch)

Exports from the major countries

According to Spices Board of India exports of pepper from India during April 2010- February 2011 stood at 16,600 tonnes as compared to 18,425 tonnes in 2009-10, decline of 10%.

According to International Pepper Community (IPC) export of black pepper from Brazil during January to March 2011stood at 7901 Mt (6911) increase of 14% as compared to previous year. Exports of Black pepper from Vietnam during January to March 2011stood at 25,000 MT, decline of 10% as compared to previous year.

Pepper exports from Indonesia during January to March 2011stood round 6,400 MT as compared to 5,700 MT in the same period previous year.

Import of Pepper in U.S. in 2010 gained by around 7% and stood at 70,469 tonnes as compared to 65,855 tonnes in 2009. Indonesia held its position of being the largest exporter shipping around 5,174 tonnes to U.S. followed by Brazil (11,517), Vietnam (10,241) and India (4,064) tonnes.

Production and Arrivals

Arrivals of pepper in the domestic mandi stood at 40 Mt as compared to 3.4Mt on Friday. Offtakes stood at 55 Mt as on Saturday.

Production of pepper in India in 2010-11 is projected to be 48 thousand tonnes (according to the Spices Board) as compared to 50 thousand tonnes last year. However, there are expectations that this estimate would be lowered further on account of the disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka.

According to International Pepper Community (IPC) global output is expected to decline by 6,500 tonnes as compared to 2010 to 3.10 lakh tonnes. Vietnam production of the spice is expected to be same as that of previous year to 1.10 lakh tonnes. Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.

Outlook

Lower supplies both in the domestic as well as in the international coupled with hoarding of Pepper by the Vietnam farmers will support pepper prices in the short term. Domestic prices will also take cues from pepper prices of Vietnam in the international market. In the short term (till May), Pepper prices will depend on demand from the overseas and domestic buyers. Prices will also take cues from stocks of pepper with the major producers, pepper prices in the international market of various origins.

In the medium to long term (June onwards), price trend will depend on pepper production in Indonesia and Brazil and demand from the overseas and domestic buyers.

Source : commodityonline.com