Pepper May contract gained Rs 300 and settled at Rs 35295/quintal on a pick-up in local buying, lower-than-expected supplies and thin stocks, though hopes of higher output restricted the upside. Farmers are holding back stocks on hopes of better prices. There is some jump in the local demand but overseas buying is still subdued. Higher arrivals of the Karnataka crop coupled with weak overseas demand may pressurise prices. Vietnam exported 38,374 mts pepper during January to March 2013. Black pepper quantity is 33,133 mts which is 26% higher than same period of last year, white pepper quantity is 5,241mts, 10% higher than same period of last year. Total turnover reached 254.1 million USD (20% higher than 2012) in which black pepper value is 207.6 million USD and white pepper is 46.5 million USD. As per the latest release from the International Pepper Community, the market remains strong with limited activity in most of the producing countries during the last week. In Vietnam however, the market was active since the material from recent crop has come to the market. Due to limited stock at other sources, Vietnam is the single supplier and determinant of market direction. Pepper prices in Vietnam remained stable during the week. Pepper arrivals decreased to 170 quintals from 180 quintals and offtakes slumped to 170 quintals from 200 quintals. Spot pepper dropped -227.6 rupees to 36045.45 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 35295/quintal while low of Rs 34870/quintal. Now support for the pepper is seen at 35012 and below could see a test of 34728. Resistance is now likely to be seen at 35437, a move above could see prices testing 35578.

Trading Ideas:

Pepper trading range for the day is 34728-35578.

Pepper gained on a pick-up in local buying, lower-than-expected supplies and thin stocks.

There is some jump in the local demand but overseas buying is still subdued.

Higher arrivals of the Karnataka crop coupled with weak overseas demand may pressurise prices.

Spot pepper dropped -227.6 rupees to 36045.45 rupees per 100 kg in Kochi market.