Indian pepper farmers are reluctant to release stock so hand to mouth stockists have been trying to cover at premium levels for their near-term requirements, Olam Spices & Vegetable Ingredients said in its November 30 Spices Market Report.
The company observed that there is not much activity across growing or trading regions but despite this prices for black pepper moved up by 2-3%, reflecting the lack of arrivals. It found that arrivals remained very low in the last few days ahead of its report. Sourcing of green pepper has started across India.
Olam Spices noted that the impact of demonetisation in India is fully weighed on the country’s high value black pepper market and this trend continues, as evident by the lack of activity and general state of hesitancy.
Due to adverse climatic conditions across growing belts, Indian production is not as lucrative as expected. In addition, imports are slowly becoming expensive as a result of the depreciation of the Indian rupee against the US dollar.
“Indian farm grade price levels are likely to remain tight for the near term due to the recent developments,” the company predicted. “In February-March 2018 we could see a marginal downward price correction from the current levels.”
Olam Spices’ price indications on ungarbled black pepper of 550-560 g/l were in the range of INR660-670 (US9.72-9.86) per kilo ex-Cochin and on ungarbled 580-600 g/l INR670-680/kg ex-Cochin.