Guestimates of International Pepper community put production at 310000 mt of both Black and white pepper for the year 2010 but where as realistically according to the agronomists of leading spice companies in the world the production was some where in the area of minimum 360000 mt against a requirement of 216000 mt by importing countries and home consumption from origin countries to the tune of 90000 mt. Basically there was no mismatch between demand vs supply figures but what went wrong was the miscalculations in assessing availability of the spice when demand was there. Even today many importers feel that asian economy is not faring well and farming community will have to sell their produce when the harvest comes and they could do nothing but to sell, but in reality the farming community has become so rich and they have no rush to sell and the best example was seen when the new crop in india came this year when the farmers decided not to sell it as they felt the current year they will see Rs 200/kg for sure which they have been anticipating for the last two years and decided to hold back.The Value added industry went in for record imports in the first half of the year so that it will keep them going till October as they are not supposed to keep the imported pepper in the country for not more than 120 days. But many has exhausted their stocks and imports totally become unviable and the pressure on indian stocks mounting with many grinders putting on their hands on the exchange stocks which can make things more worse if the sellers do not honour their commitments by not giving physical deliveries.
Vietnam the worlds largest producer and exporter has put 85000 mt across seven seas of the world, and according to VIetnasm Pepper Association the balance available from that country is only 5000 mt according to the production estimates of 90000 mt they furnished with International pepper community (IPC) But the actual production figures according to trusted agronomists who were putting the figures very correctly since 2002 the production of pepper in the country is in the ranger of AROUND 120000 - 125000mt and carry over stocks of 10000 mt and imports of 5000 mt which will make a smooth sailing to 2011 was what the importing countries thought and what happened today is literal hoarding of the commodity by the worlds largest producer and exporter of the spice to the surprise of many importing countries.
Indonesia who were ruling the Black ASTA grade pepper Biz for quite sometime now , thought that they can do it for one more year and were undercutting Vietnam and Indian ASTA pepper prices by usd 200 pmt for no reason are now caught at the wrong foot with the worlds largest pepper importer and pepper trader very active in Panjang buying directly the aslan( farmgate) grade there by making the life of major exporters difficult and quite unhappy.
Malayasia sevicing their traditional markets Japan, Korea and Taiwan with their small crop has also been importing quite a bit from Vietnam in the first half of the year to avoid supply crunch in their local market.Their prices have been totally out of line for the rest of the world other than Japan, Korea and Taiwan who predominetly using sarawak pepper and they didnt want to change the flavour profile for a few hundred dollars.
India the origin which consumes almost 75% of its production internally for home consumption and the land where they have legalised online Casino by the name National Agri Commodity ExchangesNational multi commodity exchanges was the leader in bringng up prices from usd 2850 pmt fob for asta grade in March to the current usd 4150 pmt fob levels has been behaving pretty decent this week even when Vietnam increased its prices to usd 4650 fob levels hcmc for the asta grade and 500 grams/litre prices to usd 4050 pmt fob levels and Indonesia raising their prices from usd 3700 fob panjang levels to 4100 pmt fob panjang levels on friday and Brazil moving up as high as usd 4200 fob Belem levels with buyers paying up even high as usd 4050- 4100 fob belem for august/september shipments.
The USA market which is the worlds largest single importer has been in a total denail mood has finally showed their faces on Friday and picked up all cheap priced offers from all origins and resellers as they have realised that the situation is getting worse and it will be much worse in the coming weeks and better late than never as the next big crop is seven months away and the origins will continue to squeeze as most of the pepper is still with farmers and not intermediaries.
courtsey Brazilian Pepper Trade Board, Business Standard, Economic Times. Finamcial Express and Commodity online