Pepper July contract gained Rs 145 and settled at Rs 40875/quintal mirroring the uptrend in the spot market where demand was good from local traders amid limited supplies and lower stocks. Stock position has been weak because of lower output. Prices should have moved upward but a drop in the overseas sales is hurting sentiment. Industry officials estimate local pepper output in 2012 at about 43,000-45,000 tonnes, as against 49,000 tonnes last year. However, exports have been poor because Indian-origin pepper is being offered at a premium of around $300-$400 per tonne compared to other suppliers. Black Pepper for ready delivery in Kochi, closed Wednesday's trading session on positive note with MG-1 at Rs 38,500, up by Rs 200 and Un-Garbled pepper at Rs 40,000, up by Rs 200 per 100 kg. Strong demand against the fall in the production supported the uptrend in the pepper prices with prices breaching the resistance Rs 40400 per quintal. The latest report from the IPC says that, pepper prices dropped recently due to weak overseas demand and anticipation of crop from Brazil and Indonesia. The inventory levels are weak and there is wide gap in supply and demand estimates. Spot pepper gained 186.85 rupees to 39950 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 41095/quintal while low of Rs 40480/quintal. Now support for the pepper is seen at 40538 and below could see a test of 40202. Resistance is now likely to be seen at 41153, a move above could see prices testing 41432.

Trading Ideas:

Pepper trading range for the day is 40202-41432.

Pepper rose tracking firmness in the spot market where demand was good amid limited supplies and lower stocks.

Prices should have moved upward but a drop in the overseas sales is hurting sentiment.

NCDEX accredited warehouses pepper stocks gained by 46 tonnes to 1524 tonnes.

Spot pepper gained 186.85 rupees to 39950 rupees per 100 kg in Kochi market.