Pepper February contract gained Rs 620 and settled at Rs 37935/quintal as stocks and supplies failed to keep pace with the firm winter demand. Pepper output is likely to be higher this season as a good yield is expected in the top-producing states of Kerala and Karnataka. Supplies from the new season crop start arriving in January-February. Despite the higher crop estimations, the arrivals haven't picked sharply so far and winter season demand from north India is strong. International Pepper Community's estimates the total global production during 2013 at 3.17 lakh tonne and exportable surplus at 3.19 lakh tonnes respectively. International Pepper Community projected 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. Taking into account of stock brought forward from 2011, import and domestic consumption in 2012, around 85,750 mt would be carried forward as stocks for 2013. Local pepper is expected around 50-55 thousand tonnes in 2012-2013 against 43,000 tonne in 2011-12. Indonesian crop is projected higher. Pepper harvesting will begin in end week of December in Kerala's Idukki district, the main pepper producing areas and arrivals will begin in second week of January. Spot pepper dropped -28.15 rupees to 39765.6 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 38000/quintal while low of Rs 36910/quintal. Now support for the pepper is seen at 37230 and below could see a test of 36525. Resistance is now likely to be seen at 38320, a move above could see prices testing 38705.

Trading Ideas:

Pepper trading range for the day is 36525-38705.

Pepper gained as stocks and supplies failed to keep pace with the firm winter demand

Pepper output is likely to be higher this season as a good yield is expected in of Kerala and Karnataka.

International Pepper Community's estimates the total global production during 2013 at 3.17 lakh tonne

Spot pepper dropped -28.15 rupees to 39765.6 rupees per 100 kg in Kochi market.