IND: Pepper Slips More Than Rs. 350 On Weak Exports, Arrival Pressure
NCDEX pepper slipped very sharply in the early trading session on heavy selling on weak export demand and hopes of supplies from Vietnam in the next month. The Pepper for the March contract touched the low of Rs. 23927, down Rs. 351 or 1.45% over the last close. The session high was Rs. 24246 and the contract is currently trading at Rs. 23927 per 100 kg. The open interest added 1.43% to 8,283 tonnes, indicating short selling.
Arrivals from the fresh crop has started in the spot markets of Kerala, but in very small quantities. According to International Pepper Community (IPC) report, export of black pepper from India during 2010(Jan- Dec) plunged 21.6% to 16,700 tonnes as compared to 21,300 tonnes in the previous year(2009). However, there are reports of higher imports of pepper into the country.
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.
Vietnam is the largest pepper exporter and producer in the world. In 2010, Vietnam earned $419 million from shipping abroad 116,000 tonnes of pepper and continued taking the lead in pepper exports worldwide.
According to the Ministry of Agriculture and Rural Development, despite a year-on-year shrink of 13.3 per cent in volume, pepper export turnover rose 22.5 per cent mostly due to the global increase of pepper price.
There are reports that harvesting in Vietnam has commenced in small quantity and the prices offered by them in the international market for their 550Gl are around $4,500/tonne. Arrivals are likely to gain momentum by March.
The pepper market could see some downward bias in the coming days with more pepper arriving from the hinterlands as harvest progress. Globally too, the market is seen easing with Vietnam devaluing its currency and increasing its production estimates for the year.
