Limited arrival of pepper from producing regions and poor availability in the terminal markets have prompted Indian exporters to source their requirement from Vietnam.

Pepper prices in the futures market have dropped because of good arrival in the spot markets and profit booking by traders, but in reality supplies in the physical markets in down, traders said.

Either farmers are holding on their stocks or the supplies are being met from reserves, P Nandakumar, a trade consultant based in Kochi told FE.

Pepper exports in January were estimated to be around 1,500 tonne, down 28.57 percent compared to the same month of last year. Exports in December stood at 1,750 tonne, down 32 percent from last year.

Weak trend in the global markets also pulled down exports. Pepper market is likely to overcome the selling pressure and firm up towards the end of March based on strong domestic demand and low supplies, says a study by the Agricultural Market Intelligence Centre (AMIC) of Kerala Agricultural University.

Arrival pressure from India and Vietnam coupled with the reluctance of buyers to commit has put pressure on the spot and futures market, says K Satheesh Babu of AMIC.

“Exports should have been naturally good during the harvest season. Other producers are not active in the market. But Indian prices are still higher than Vietnam indicating a low supplies or hoarding,” Nandakumar.

According to the projections of the Jakarta-based International Pepper Community, global pepper production is expected to rise by 3 percent in 2010 to 290,742 tonne from 281,974 tonne last year. However, the carryover stock of pepper is estimated to slip 32 percent in 2010 to 79,124 tonne from 116,325 tonne in 2009, sources said. (Express India)