Pepper February contract gained Rs 120 and settled at Rs 36100/quintal on depleting stocks and limited supplies, though an estimated rise in output and weak exports kept the upside limited. Weak export demand due to the premium prices in the international markets and strong crop projection in the local market added downside support. Pepper rallied in the last few sessions lead by short covering and weak arrivals in the local mandis. Despite the higher crop estimations, the arrivals haven't picked sharply so far and winter season demand from north India is strong. The recent rally was temporary phenomena. According to the latest updates from India Pepper and Spice Trade Association (IPSTA), Kochi, Pepper arrivals increased to 230 quintals from 210 quintals and offtakes jumped to 230 quintals from 200 quintals. However, higher output expectations capped sharp upside. FMC is probing into complaints against movement in the pepper market which has capped a sharp upside. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. Spot pepper dropped -124.3 rupees to 38481.25 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 36320/quintal while low of Rs 35720/quintal. Now support for the pepper is seen at 35773 and below could see a test of 35447. Resistance is now likely to be seen at 36373, a move above could see prices testing 36647.

Trading Ideas:

Pepper trading range for the day is 35447-36647.

Pepper ended with gains on depleting stocks and limited supplies though an estimated rise in output kept upside limited

Weak export demand due to the premium prices in the international markets and strong crop projection added downside support

Pepper arrivals increased to 230 quintals from 210 quintals and offtakes jumped to 230 quintals from 200 quintals.

Spot pepper dropped -124.3 rupees to 38481.25 rupees per 100 kg in Kochi market.