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Pepper prices are seen weak due to imports from Sri Lanka and reports that 6,000 tonne seized by the Food Safety and Standards Authority of India (FSSAI) would be released into the market.
In the global market,
supply from Indonesia and Brazil is likely to keep the market under pressure in the coming days. India is
the largest consumer of pepper in the world and the second largest producer after Vietnam.
Prices in the terminal market of Kochi have declined by R50 per kg from the peak of R750 per kg reached during June.
India is still the costliest origin at $12,400 per tonne for ASTA grade compared to $9,500 of Vietnam. “Imports from Sri Lanka have pulled the market down and it is
reported that more than 1,000 tonne has reached the North India market via the Mumbai port. Indonesia is active in the market and Brazil is expected to be active from next month. According to official reports, Vietnam has already sold 1, 25,000 tonne,” Jojan Malayil of Kochi-based Bafna Enterprises said.
He feels that demand may pick up in the coming days as Europeans and US buyers become active after the annual break.
Kishore Shamji, a senior exporter and member of India Pepper and Spice Trade Association (IPSTA), estimates the market to remain weak as supply improves in the domestic market.
“It is reported that 6,000 tonne would be released soon from judicial custody. This would bring down the pressure in the market. Imports from Sri Lanka would go up by 1,000 tonne to touch a total of 2,000 tonne. Prices are likely to come under pressure,” he added. FSSAI had seized nearly 6,800 tonne in December 2012 to investigate charges of adulteration. It has released nearly 800 tonne so far.
Indian supply continues to remain low due to declining production. A paper presented at the last World Spice Congress held at Kochi reported that Indian pepper production for the season of 2013-14 would be 34,000 tonne as against 45,000 tonne reported by
International Pepper Community (IPC). The IPC annual conclave reports that global production in 2014 would be lower by around 6,000 tonne when compared to this year. According to IPC figures, production during 2013 was pegged around 3,16,832 tonne.
Pepper prices in India had touched record levels during May-June due to lower availability and reports of below normal monsoon.