T Vidyasagar, former president of Indian Pepper and Spices Trade Association (IPSTA), who was the chairman of the working group on International Commodity Exchange (ICE) of International Pepper Community (IPC) said the initial trends from various pepper producing countries indicate an year of over production in 1999. "With all the major countries stepping up the production, 1999 will be an year of over production", he said.

He said according to the estimated production figures presented by various member countries to the recently concluded IPC conference in Bali, Indonesia, the global pepper production is pegged at 2,02,300 tonnes which is substantially higher than the estimatedproduction last year.

Vidyasagar said a major reason for the hike in production by the major pepper producing countries was the high prices fetched by pepper during the last two year. He said from a low of Rs 70-80 per Kg the prices shot up to Rs 230 per kg during the last two years. "This has motivated all pepper producing countries to plant more leading to glut situation in the market".

He said, the Indian crop, which is estimated to be around 70,000 tonnes next year with a carryover stock of another 7,000 tonnes will arrive in the market from January next, he said. The Vietnamese crop, which is estimated to be around 30,000 tonnes, will also arrive the market from March next. However, the black pepper crop in Indonesia is estimated to be lower at 14,000 tonnes on the La nina effect on the Lampoong crop. But, the white pepper production is estimated to be at an high of 30,000 tonnes in 1999.

Vidaysagar said, with all indications, the over production is likely to bring the prices down next year. Hesaid the early indication of lower prices has already been evident from the southward journey of the long-end forward contracts.

However, he said the situation may well lead to the building up of trade stock and intermediary cushion. "Presently, it is hand to mouth market with no inventory. With the lower prices, the traders and growers will start building stocks", he added.

With the pepper prices touching a high of Rs 230 per kg the entire stock was cleared by traders and growers, he pointed out. He said eight members of the IPC have evinced keen interest in joining the Ipsta-run InternationaL Commodity Exchange. These members are Singapore, Indonesia, Malaysia, France, Germany and the UK.