Pepper December contract gained Rs 985 and settled at Rs 38260/quintal surged on speculative activity boosted by spot demand on wedding season. Some bounce-back is seen in futures but fundamentals are still bearish. Prices may fall again from higher levels because of estimates of higher output. Higher pepper production is expected after rains picked up in the states of Karnataka and Kerala, the top two producers. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. IPC approved production and export estimates of pepper in 2012 would be around 324,000 mt and 249,000 mt respectively, as against 317,700 mt and 246,200 mt in 2011. Taking into account of stock brought forward from 2011, import and domestic consumption in 2012, around 85,750 mt would be carried forward as stocks for 2013. Spot pepper gained 209.1 rupees to 38294.1 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 38580/quintal while low of Rs 37000/quintal. Now support for the pepper is seen at 37313 and below could see a test of 36367. Resistance is now likely to be seen at 38893, a move above could see prices testing 39527.

Trading Ideas:

Pepper trading range for the day is 23671-26831.

Pepper gained surged on speculative activity boosted by spot demand on wedding season.

Global pepper production in 2012 is projected at 3.27 lk tn, up by 12.7% compared with 2.98 lk tn in 2011

NCDEX accredited warehouses pepper stocks gained by 16 tonnes to 5519 tonnes.

Spot pepper gained 209.1 rupees to 15650 rupees per 100 kg in Kochi market.