Pepper May contract gained Rs 110 and settled at Rs 35800/quintal due to lower-than-expected supplies from Kerala and thin stocks, though subdued exports and estimates of higher output weighed on sentiment. Karnataka and Kerala are the leading pepper producing states in the country. Supplies from the new season crop in Karnataka have started gaining pace. Improved demand from North India ahead of the festive season could support the market sentiments in the coming days. Indian pepper output is expected at 55000 tons in 2013 vs 43000 tons in 2012. Export is estimates at 25000 tons in 2013 vs 17500 tons in 2012. On the International front, better crop expectations from Indonesia and Sri Lanka and better crop and stock levels in Vietnam have also prevented the rates from rising a lot in the short term. Latest reports keep production estimates in Vietnam at 1.35-1.40 lakh tons vs 1.0-1.10 lakh tons of the earlier estimates. The International Pepper Community (IPC), the inter-governmental organisation of major pepper-producing countries, says the global production shortage will be around 10,000 tonne to 15,000 tonne. Global production in 2013 is predicted to drop by around 10% though Indian output is expected to show an almost 30% rise at 55,000 tonne. Spot pepper gained 125 rupees to 35725 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 36160/quintal while low of Rs 35515/quintal. Now support for the pepper is seen at 35490 and below could see a test of 35180. Resistance is now likely to be seen at 36135, a move above could see prices testing 36470.

Trading Ideas:

Pepper trading range for the day is 35180-36470.

Pepper edged up due to lower-than-expected supplies from Kerala and thin stocks, though subdued exports weighed on sentiment.

Supplies from the new season crop in Karnataka have started gaining pace.

Latest reports keep production estimates in Vietnam at 1.35-1.40 lakh tons vs 1.0-1.10 lakh tons of the earlier estimates.

Spot pepper gained 125 rupees to 35725 rupees per 100 kg in Kochi market.