Pepper February delivery dropped Rs 95 and settled at Rs 31830/quintal due to a squeeze in supplies as farmers held back produce hoping for the prices to rise and estimates of lower output. India is the third largest pepper producer in the world followed by Vietnam and Indonesia. Domestic supplies are thin as of now but they may improve by month-end. Supplies from the new season crop have started arriving in small quantities in southern Kerala and Karnataka states. According to Spices Board of India, exports of pepper during April 2011- November 2011 stood at 17,000 tonnes as compared to 11,850 tonnes in 2010-11, rise of 43.6%.According to International Pepper Community (IPC) exports of black pepper during January to October 2011 from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 2.04 lakh tonnes a decline of 4.6% as compared to 2.14 lakh tonne in the same period last year. Spot pepper gained 87.5 rupees to 31650 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 32185/quintal while low of Rs 31700/quintal. Now support for the pepper is seen at 31625 and below could see a test of 31420. Resistance is now likely to be seen at 32110, a move above could see prices testing 32390.

Trading Ideas:

Pepper trading range is 31420-32390.

Pepper ended higher due to a squeeze in supplies as farmers held back produce hoping for the prices to rise

Supplies from new season crop have started arriving in small quantities in southern Kerala and Karnataka states

NCDEX accredited warehouses pepper stocks dropped by 140 tonnes to 4466 tonnes.

Spot pepper gained 87.5 rupees to 31650 rupees per 100 kg in Kochi market.