Vietnam and Brazil slashed their respective black pepper prices in the last few weeks, much to the surprise of global importers and Indian exporters.
Vietnam has reduced the price of ASTA grade to US$3,080 a tonne, whereas Brazil, where harvesting is in full swing, has quoted US$2,800 for B-ASTA.
Just as predicted by analyts a few weeks ago, the global black pepper market is poised for a bearish outlook. Market sources expect Vietnam to further slash the price to even below US$2,800.
On the contrary, the domestic market will be on a slightly bullish mode, thanks to lower stocks and gearing up of demand for the winter.
India is virtually out of the global pepper market as the current tag for MG1 is up by US$525 a tonne than Brazil and by US$245 than Vietnam. Market sources do not foresee overseas demand in the near future, but the domestic market is not expected to collapse.
India has a stock of around 17,000 tonnes including 5,200 tonnes of valid pepper and 5,000 tonnes of farm gate stuff with the commodity exchanges. According to leading Kochi-based traders, this stock will be fully exhausted by winter.
Vietnam has been forced to slash the prices owing to the stock position there. The country still has a stock of 35,000 tonnes, which it is literally trying to get rid of before the next crop season.
The incorrect pricing strategy that Vietnam adopted in the last crop season put it in such a market situation, a leading exporter said.
Meanwhile, the harvesting season in Brazil is active now and according to estimates, the crop size would be in a range of 35,000 to 40,000 tonne. The country quoted B1 grade at US$2,750, a tonne.
Interestingly, along with India, Indonesia is quoting a higher price at US$3,450, thanks to low production. The total crop size is expected to be below 10,000 tonnes this time, according to various reports.
It is likely that India will be an active importer of pepper from Brazil and Vietnam as the price tags are attractive for value-added products manufacturers here.
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