Lean local trade, exports hit pepper mkt.

Kochi: Pepper market in India is going through a bearish phase with the decline in domestic trade and export volumes. Traders are expecting very little trade in the near-term and are hopeful that the market will rebound only with the festival demand next month. Supply has declined to the minimal with farmers and traders unwilling to part with the commodity at lower prices.

According to Kotak Commodity Services, buying interest is low and sellers are not willing to make sales and budge further at the lower prices quoted by the buyers. Higher prices have meant lesser export demand which is weighing on sentiments.

But for the squeeze in supply, prices would have eased more, a trader from Kochi market said. In the global trade, India has been outpriced by most of the origins. Vietnam has sold nearly 90,000 tonne through the official channel alone between January and July, Jojan Malayil of Bafna Enterprises, the largest exporter of Indian black pepper, told FE. Bafna has operations in India and Vietnam.

“They have sold some volume through the cross-border trade. Our conservative estimate is that Vietnam still has 25,000-30,000 tonne left with it,” Jojan added. Indonesia is selling aggressively to the US market and they are well stocked for the moment, which means demand for Indian pepper will drop further, he added. Europe and the US normally buy during the August-September period for Christmas consumption.

However, some traders are of the opinion that stocks with the farmers are limited and most of them liquidated the stocks when prices rose swiftly. “The carryover stock with small farmers is almost nil. After some years of lower price, they sold when they got a chance,” Sunil Augustine, partner of a spice trading company in Thodupuzha told FE. The market was under Rs 150 per kg for most part of 2009 and 2010 and when the prices gained, some of them sold out their stocks, he added. Sunil estimates that there are rich farmers who are holding back stock but unwilling to sell at lower rates.” They are cash rich with good returns from rubber and other crops. Pepper can be stocked relatively longer compared to other crops,” he said.

Jojan feels there is plenty of stock in the up-country market with traders who had brought the commodity to make profit. Pepper from Karnataka is also available in the market, he added. But...

Source : financialexpress.com