The black pepper prices in India are poised for a weaker phase globally due to poor offtake by major buying countries such as the US and EU, though the supply of the spice is weak.
Major buyers are shifting to Indonesia and Brazil which at present are supplying the ASTA grade variety at $2,900 and $3,000 a tonne respectively. The ASTA grade prices in India are around $3,075-$3,100 a tonne. So, major demand is fulfilled by Indonesia and Brazil.
Confusing reports over the stock in Indonesia makes it difficult to judge the market positions. Most of the exporters said that Indonesia, at present, has a valid stock of around 5,000-7,000 tonnes. This is sufficient for supply in the next three months. So, only India and Vietnam will face a shortage as the next season is still 90 days away. It is reported that Vietnam is not in a hurry to clear the available stock, hence it may not reduce the price substantially. But the pricing strategy of Brazil and Indonesia will decide the movement of global pepper market.
At present, India has no demand from the domestic as well as the global markets. Demand for the winter season is also weak due to higher prices.
A depreciation of $50-$100 a tonne is expected as the overseas demand is rather weak. Major buying nations are also not in a hurry, but the demand by re-sellers will be a crucial factor in the market.
Meanwhile, pepper imports by the US from India have dropped heavily in July. US imported 366 tonnes from India against 760 tonnes in the same month last year. The main reason for this is India’s price tag, which is the highest across the world.
Source : Business Standard