Pepper June contract gained Rs 755 and settled at Rs 39750/quintal on the back of improved buying due to strong export demand. However, global Pepper production in 2012 is expected to increase by 7.2 per cent to 3.20 lakh tonnes against 2.98 lakh tonnes in 2011. On the International front, better crop expectations from Indonesia and Sri Lanka and better crop and stock levels in Vietnam too could keep prices subdued in the near term. Latest reports keep production estimates in Vietnam at 1.35-1.40 lakh tonnes vs 1.0-1.10 lakh tonnes of the earlier estimates. 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. According to the latest updates from India Pepper and Spice Trade Association (IPSTA), Kochi, Pepper arrivals in Kochi Mandi stood at 340 quintals, meanwhile offtakes stood at 210 quintals. Spot pepper gained 737.2 rupees to 39272.2 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 40250/quintal while low of Rs 39410/quintal. Now support for the pepper is seen at 39357 and below could see a test of 38963. Resistance is now likely to be seen at 40197, a move above could see prices testing 40643.

Trading Ideas:

Pepper trading range for the day is 38963-40643.

Pepper gained on the back of thin supply in the spot markets along with rising domestic demand.

Better crop expectations from Indonesia and Sri Lanka and better crop and stock levels in Vietnam kept prices subdued.

NCDEX accredited warehouses pepper stocks dropped by 115 tonnes to 1212 tonnes.

Spot pepper gained 737.2 rupees to 39272.2 rupees per 100 kg in Kochi market.