Pepper April delivery gained Rs 320 and settled at Rs 41785/quintal on some buying support though upside was limited due to increased arrivals in the mandis. Overall supplies have been low in the local market since the start of the season on reduced arrivals from farmers. Traders anticipate short term trend to remain weak as they wait for further corrections before initiating fresh demand in the mandis. Short term trend expected to remain volatile with medium to long term looking positive on good demand amidst low production and low stock prospects. New crop arrivals from Vietnam and increased Indian arrivals had been there. 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. 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. The production in Vietnam, the largest producer, is expected at 1.10 lakh tonnes – a rise of 10,000 tonnes. Spot pepper dropped -235.95 rupees to 40652.95 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 42420/quintal while low of Rs 40825/quintal. Now support for the pepper is seen at 40933 and below could see a test of 40082. Resistance is now likely to be seen at 42528, a move above could see prices testing 43272.

Trading Ideas:

Pepper trading range for the day is 40082-43272.

Pepper gained on some buying support though upside was limited due to increased arrivals in the mandis

Overall supplies have been low in the local market since the start of the season on reduced arrivals

NCDEX accredited warehouses pepper stocks dropped by 50 tonnes to 1879 tonnes.

Spot pepper dropped -235.95 rupees to 40652.95 rupees per 100 kg in Kochi market.