Pepper August contract gained Rs 270 and settled at Rs 41370/quintal on the back of fresh buying against the strong demand amid weak supplies. The buyers in the international market have been waiting for increased arrivals from Vietnam and Indonesia. The harvesting in Vietnam has completed, with a slight increase in production over the last year; but there will not be surge in arrivals in Vietnam, because pepper farmers are watching the daily price movements and willing to hold back, if the price is declining. Hence the supply situation in the world market will remain tight. In India, despite a correction in the last few days and in July/August contracts, the price is expected to increase, due to drop in supply and higher demand from institutional buyers. Strengthening rupee against dollar expected and better holding power of Vietnamese farmers will also increase the price level. Since, the crops is yet to arrive the markets in Indonesia and the production has been sold already, even the small increase expected in productivity in selected areas, due to better weather conditions is not going to make any significant impact in the supply of pepper from Indonesia. Spot pepper gained 103.3 rupees to 40283.3 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 41460/quintal while low of Rs 40940/quintal. Now support for the pepper is seen at 41053 and below could see a test of 40737. Resistance is now likely to be seen at 41573, a move above could see prices testing 41777.

Trading Ideas:

Pepper trading range for the day is 40737-41777.

Pepper ended higher on the back of fresh buying against the strong demand amid weak supplies.

The harvesting in Vietnam has completed, with a slight increase in production over the last year

NCDEX accredited warehouses pepper stocks gained by 75 tonnes to 1579 tonnes.

Spot pepper gained 103.3 rupees to 40283.3 rupees per 100 kg in Kochi market.