Pepper August delivery dropped Rs 90 and settled at Rs 29335/quintal due to lower export demand and decline in prices of the commodity overseas however thin arrivals and reports lower production in other countries such as Vietnam limited the downside. As per the latest release from the Spices Board of India, during April-June 2011, a total quantity of 5,750 tonnes of pepper valued Rs.150.38 crores have been exported as against 4,750 tonnes valued Rs.79.96 crores of last year. The unit value of pepper has increased from Rs.168.35 per kg in Apr-June 2010 to Rs.261.52 per kg during April-June 2011. According to estimation by Spices Board, production of pepper in India in 2010-11 is projected to be 48 thousand tonnes over 50 thousand tonnes last year. However, there are expectations that this estimate would be lowered further on account of the disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka. According to the market sources, India's yearly demand is around 50,000 tonnes for its domestic consumption. The contract touched the intra day high of Rs 29550/quintal while low of Rs 29226/quintal. Now support for the pepper is seen at 29191 and below could see a test of 29046. Resistance is now likely to be seen at 29515, a move above could see prices testing 29694.

Trading Ideas:

Pepper trading range is 29044-29692.

Pepper dropped due to lower export demand and decline in prices overseas

Production of pepper in India in 2010-11 is projected to be 48 thousand tonnes over 50 thousand tonnes last year.

NCDEX accredited warehouses pepper stocks rose by 46 tonnes to 3901 tonnes.

Spot pepper gained 225.95 rupees to 29038.45 rupees per 100 kg in Kochi market.