Pepper April contract gained Rs 140 and settled at Rs 35430/quintal tracking firm cues from spot where seasonal demand was good. Slack supplies and depleting stocks also aided the sentiment. Low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Pepper output is likely to be higher this season as a good yield is expected from the top-producing states of Kerala and Karnataka. Supplies have picked up from Karnataka, but are still below the expected levels because of labour shortage. Farmers holding back stocks is also hurting the supplies. IPC estimates the total global production during 2013 at 3.17 lakh tonne and exportable surplus at 3.19 lakh tonnes respectively. 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. As per the latest release from the Brazilian Pepper Trade Board, Brazil had shipped 4,703 tonnes of Black Pepper during the first two month of 2013, out of it, 2,408 tonnes exported in January and 2,295 tonnes in February. The biggest buyer as always was USA, followed by Germany and Spain. Interesting also is that in January, 175 tonnes were shipped to Vietnam. Spot pepper dropped -314.25 rupees to 36400 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 35590/quintal while low of Rs 34980/quintal. Now support for the pepper is seen at 35077 and below could see a test of 34723. Resistance is now likely to be seen at 35687, a move above could see prices testing 35943.

Trading Ideas:

Pepper trading range for the day is 34723-35943.

Pepper gained tracking firm cues from spot where seasonal demand was good.

Low stocks coupled with good demand from the upcountry markets may support prices at lower levels.

Supplies have picked up from Karnataka, but are still below the expected levels because of labour shortage.

Spot pepper dropped -314.25 rupees to 36400 rupees per 100 kg in Kochi market.