Pepper Tumbles On NCDEX 23rd feb

Indian pepper futures dropped sharply on continued selling pressure on weak export demand amid higher arrivals. The NCDEX pepper for the March delivery touched the low of Rs. 23360 and the contract ended the last session down at Rs. 23585, down Rs. 111 or 0.46% over the last close. The open interest added 2.31% to 10069 tonnes, indicating short selling and volume traded declined to 3,585 tonnes from 6,755 tonnes.

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.

Indonesia continued to the major supplier of whole black pepper to the US market, shipping 25,174 mt (48%), followed by Brazil (11,517 mt), Vietnam (10,241 mt) and India (4,064 mt). These four countries supplied 98% of whole black pepper to the United States. Indonesia also remains the most important source for whole white pepper, supplying 3,255 mt (56%), followed by Vietnam 1,918 mt (33%). These two countries supplied 88%.

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. Arrivals from the fresh crop have started in the spot markets of Kerala, but in very small quantities.

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.

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.