Pepper August contract gained Rs 140 and settled at Rs 43015/quintal on thin domestic supplies and lesser stocks with major cultivating countries, but weak overseas sales due to high priced Indian produce kept the upside limited. Spot market is very firm because arrivals are less but weakness in export demand is capping the upside. Indian origin pepper is around $1,000 per tonne costlier than other suppliers in the global market. India is the third largest pepper producing country in the world after Vietnam and Indonesia. On the International front, better crop expectations from Indonesia and Sri Lanka and better crop and stock levels in Vietnam have also prevented the rates from rising a lot in the short 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%. Malaysian production also expected higher at 26500 tonnes vs 25600 tonnes. Indian production expected to decline by 5000 tonnes at 43000 tonnes. Spot pepper gained 97.85 rupees to 41452.6 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 43170/quintal while low of Rs 42725/quintal. Now support for the pepper is seen at 42770 and below could see a test of 42525. Resistance is now likely to be seen at 43215, a move above could see prices testing 43415.

Trading Ideas:

Pepper trading range for the day is 42525-43415.

Pepper rose on thin domestic supplies and lesser stocks with major cultivating countries

Indian origin pepper is around $1,000 per tonne costlier than other suppliers in the global market.

NCDEX accredited warehouses pepper stocks gained by 10 tonnes to 1580 tonnes.

Spot pepper gained 97.85 rupees to 41452.6 rupees per 100 kg in Kochi market.