Dry weather in Vietnam and uncertainty over how long the El Nino-induced drought will cap Indonesian supply continued to boost pepper prices last week, traders said.

'People are just a bit concerned that if drought hits Asian pepper crops, there won't be the supply later down the line,' a Ho Chi Minh City-based trader said.

Offers for India's benchmark black pepper, MG1, have risen some $100-$200/tonne over the past week to $5,550/tonne, traders said. These offers were for nearby shipment through June, FOB Cochin.

Few offers are heard on Friday because most of India's businesses were closed for a holiday.

Indonesia's Lampung asta black pepper has traded throughout the week in a range between $5,200/tonne and $5,600/tonne, FOB Panjang, for third-quarter 1998 shipment.

Rain falling over most parts of Indonesia,including the pepper-producing regions of the island of Sumatra, is easing fears of damage to next year's crop.

However, traders warned that it is far too early to set those concerns aside given the severity and length of the drought which has gripped Indonesia since mid-1997.

Concerns over dry weather has kept Vietnamese pepper prices on an uptrend this week, traders said. Offers for Vietnam's benchmark black FAQ pepper have increased by around $600/tonne, FOB Ho Chi Minh City, traders said. Vietnamese black pepper FAQ was quoted on Friday at $5,450/tonne.

Seasonally low supplies of Malaysia's Sarawak Asta black pepper have kept most sellers of that grade sidelined last week though offers were heard on last Wednesday at $5,500/tonne -FOB for shipment in April. No offers were heard on last Friday.