Pepper May delivery dropped Rs 395 and settled at Rs 38250/quintal as higher supplies from Vietnam weighed on prices. 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. 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. Spot pepper gained 453.1 rupees to 38047.2 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 39370/quintal while low of Rs 38085/quintal. Now support for the pepper is seen at 37767 and below could see a test of 37283. Resistance is now likely to be seen at 39052, a move above could see prices testing 39853.

Trading Ideas:

Pepper trading range for the day is 37283-39853.

Pepper dropped as higher supplies from Vietnam weighed on prices.

Latest reports keep production estimates at 1.35-1.40 lakh tonnes vs 1.0-1.10 lakh tonnes of the earlier estimates

NCDEX accredited warehouses pepper stocks dropped by 3 tonnes to 1974 tonnes.

Spot pepper gained 453.1 rupees to 38047.2 rupees per 100 kg in Kochi market.