Pepper March delivery dropped Rs 143 and settled at Rs 23540/quintal on sluggish export demand but estimates of lower output and a squeeze in daily supplies restricted the downside. Export demand is weak because Vietnam is offering lower (rates) than India. But prices are unlikely to fall much from these levels because stocks are very thin globally. Local arrivals from the fresh crop has started coming in the spot markets of Kerala but in very small quantity. Production of pepper in India in 2010-11 is projected to be 48 thousand tonnes as compared to 50 thousand tonnes last year. Spot pepper gained 11.75 rupees to 23488.2 rupees per 100 kg in Kochi market. The contract touched the intraday high of Rs 23840/quintal while low of Rs 23375/quintal. Now support for the pepper is seen at 23330 and below could see a test of 23120. Resistance is now likely to be seen at 23795, a move above could see prices testing 24050.

Trading Ideas:

Pepper trading range is 23118-24048.

Pepper ended down Saturday on sluggish export demand

Pepper looks to test support at 23380 and resistance is seen at 23660.

NCDEX accredited warehouses pepper stocks rose by 310 to 2721 tonnes.

SELL PEPPER MAR @ 23650-23700 SL 23880 TGT 23560-23450-23280.NCDEX

Spot pepper gained 11.75 rupees to 23488.2 rupees per 100 kg in Kochi market.