Pepper January delivery gained Rs 10 and settled at Rs 35630/quintal due to a supply squeeze in spot and estimates of lower domestic output. Competitive prices in the global market also supported the trend. Indian origin pepper is priced $400-$500 per tonne lower than other competitors in the international market. Industry officials are estimating domestic pepper output at 43,000-45,000 tonnes for 2012 compared to 49,000 tonnes last year. As per IPC latest estimates, global Pepper production expected to rise to 3,20,000 tonnes in 2012 vs 2,98,000 tonnes this year a rise of 7.2%. Global exports expected to rise to 2.46 lakh tonnes vs 2.42 lakh tonnes in 2011. 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. Reports of farmers shifting to other more profitable crops have affected the production aspects for the crop in India. Spot pepper gained 189.85 rupees to 36542.5 rupees per 100 kg in Kochi market.. The contract touched the intra day high of Rs 35950/quintal while low of Rs 35430/quintal. Now support for the pepper is seen at 35390 and below could see a test of 35150. Resistance is now likely to be seen at 35910, a move above could see prices testing 36190.

Trading Ideas:

Pepper trading range is 35150-36190.

Pepper ended up due to a supply squeeze in spot and estimates of lower domestic output

Indian origin pepper is priced $400-$500 per tonne lower than other competitors in international market

NCDEX accredited warehouses pepper stocks gained by 31 tonnes to 4650 tonnes.

Spot pepper gained 189.85 rupees to 36542.5 rupees per 100 kg in Kochi market.