Pepper February contract gained Rs 300 and settled at Rs 37400/quintal due to low stocks, thin supplies and high demand. Pick up in demand in the mandis from the Festive season in the Southern states like Tamil Nadu and the neighboring states however provided support to the prices. Weak export demand due to the premium prices in the international markets and strong crop projection in the local market limited upside. Pepper rallied 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 a temporary phenomenon. Prices came off their high on technical cues amid weak arrivals. According to the latest updates from India Pepper and Spice Trade Association (IPSTA), Kochi, Pepper arrivals decreased to 100 quintals from 220 quintals and offtakes slumped to 50 quintals from 250 quintals. According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Spot pepper dropped -25 rupees to 38937.5 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 37460/quintal while low of Rs 37030/quintal. Now support for the pepper is seen at 37133 and below could see a test of 36867. Resistance is now likely to be seen at 37563, a move above could see prices testing 37727.

Trading Ideas:

Pepper trading range for the day is 36867-37727.

Pepper prices ended with good gains due to low stocks, thin supplies and high demand.

Weak export demand due to the premium prices in the international markets and strong crop projection limited upside.

Despite the higher crop estimations, arrivals haven't picked sharply so far and winter season demand from north India.

Spot pepper dropped -25 rupees to 38937.5 rupees per 100 kg in Kochi market.