Pepper June contract gained Rs 605 and settled at Rs 39760/quintal on limited stocks in the domestic markets amid thin supply. Pepper imports by U. S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Higher production estimates from Vietnam has been keeping sentiments slight weak. Latest reports keep production estimates at 1.35-1.40 lakh tonnes vs 1.0-1.10 lakh tonnes of the earlier estimates. Expected higher arrivals of the new crop in International and the domestic markets and European and US exports being on the lower side some more fall in rates can be expected in the near term though medium to long term trend looks firm on expected rise in demand in coming months. With Indian production expected lower due to adverse weather, lower acreage and a fall in productivity, any rise in exports could support the prices from a medium to long term point of view. Indonesian production expected to rise to 41000 tonnes up from 33000 tonnes. Malaysian production also expected higher at 26500 tonnes vs 25600 tonnes. Indian production expected to decline by 5000 tonnes at 43000 tonnes. Spot pepper gained 948.35 rupees to 38540 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 40285/quintal while low of Rs 39300/quintal. Now support for the pepper is seen at 39278 and below could see a test of 38797. Resistance is now likely to be seen at 40263, a move above could see prices testing 40767.

Trading Ideas:

Pepper trading range for the day is 38820-40790.

Pepper settled higher on limited stocks in the domestic markets amid thin supply.

Pepper imports by U. S. declined 14.8% in the first 2 months of year to 8810 tn as compared to 10344 tn.

NCDEX accredited warehouses pepper stocks dropped by 113 tonnes to 1472 tonnes.

Spot pepper gained 948.35 rupees to 38540 rupees per 100 kg in Kochi market.