Pepper February delivery dropped Rs 175 and settled at Rs 29300/quintal on subdued export demand and on expectations fresh arrivals from the new season crop will improve in coming days. Supplies from the new season crop have started arriving in small quantities in southern Kerala and Karnataka states. Local supplies are expected to improve in coming days. New crop arrivals from Vietnam is also likely to start by Feb. end or March. However with Indian production expected lower due to ad-verse weather, lower acreage and a fall in productivity, any rise in exports could support the prices at these lower levels. There are expectations of some more corrections in the short term as higher production estimates are keeping pressure on the market sentiments. Medium term trend however looks positive on expected rise in export demand. 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. Spot pepper dropped -136.2 rupees to 30861.15 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 29800/quintal while low of Rs 28880/quintal. Now support for the pepper is seen at 28853 and below could see a test of 28407. Resistance is now likely to be seen at 29773, a move above could see prices testing 30247.

Trading Ideas:

Pepper trading range is 28407-30247.

Pepper dropped on subdued export demand and on expectations fresh arrivals from new season crop will improve

New crop arrivals from Vietnam is also likely to start by Feb. end or March

NCDEX accredited warehouses pepper stocks dropped by 26 tonnes to 4032 tonnes.

Spot pepper dropped -136.2 rupees to 30861.15 rupees per 100 kg in Kochi market.