MUMBAI (Commodity Online): Brazilian Pepper Trade Board forecasted a better outlook for pepper in 2010 as the global demand for the black gold is soaring amid the lower stock position.

The global pepper production is expected to decline in 2010 while the stock position in the major importing countries is seen down, said a latest report from the Brazilian Pepper Trade Board (BPTP).

The stock position in the leading importing nation is at record low levels because of macro economic situations in European Union and North America, it said.

Major producers of pepper in the world such as Vietnam, Indonesia, Brazil and India said the stocks are comparatively down in the respective countries and the production is expected to fall in 2010, which would lift pepper prices in the international market as the global demand is firming.

India, the second largest producer, who forecasted a 10% increase in crop size for the year 2010, is seen as dried market on the absence of fresh arrivals from the producing centers as well as the terminal markets in Cochin.



Since the crop was a bit delayed as everyone thought, it will be available by mid January and now February is over and still no signs of flow seen for the Black Gold. Pepper cultivation has become UN remunerative with farmers not planting any more and not taking care of the existing vines. On top of that, the very high wages in Kerala the highest in the country is also keeping farmers away from looking after the King Spice.

The importing countries are patiently waiting for Vietnam to reduce prices further so that they can comfortably start buying and paying very high spot prices and there, by making the spot market dry in both USA and European Union. The difference between shipment prices and spot Ny/ Rotterdam/Hamburg prices have widened with holders tightening their belt making buyers nervous.

With shipment possibilities from Vietnam for processed Black pepper very bleak in the month of March in quantities. some of the importers in USA and European Union paid the asking prices of shippers from India although there were stray sellers quoting USD 200 pmt below the current future prices in NCDEX which is already discounted by Rs 5/Kg from the available spot farm gate pepper.

Every importing country is looking at Vietnam as the cheap source are waiting further to buy low as many importers feel that Vietnam will have to sell as importers are keeping away and the pressure is mounting on them.

With record exports from Vietnam in 2009 (135,000 mt ) Brazil (38,000 mt) Indonesia (34,000 mt ) besides India (less than 20,000 mt ) 00 (15,000 mt ) and Sri lanka 8000 mt it seems there is no urge for exporters to take sales and create a short position as many feels creating a short position at current levels is not advisable.

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