Pepper August contract gained Rs 185 and settled at Rs 43205/quintal on dwindling stocks and thin supplies in the domestic market while weakening export demand restricted the upside. Fundamentals are supportive for pepper and are keeping prices firm. But an increase in supplies from Indonesia into the global market could weigh on sentiment. Reports that farmers in Vietnam are willing to hold their produce expecting higher prices also supported the prices while reports of arrivals from Indonesia and Malaysia capped sharp gains. According to Spices Board of India, exports of Pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. According to the latest updates from India Pepper and Spice Trade Association (IPSTA), Kochi, Pepper arrivals in Kochi Mandi increased to 450 quintals from 200 quintals, meanwhile offtakes jumped to 420 quintals from 400 quintals. Exports of Pepper from Vietnam during January till mid of June 2012 is estimated around 62000 mt almost same as that of corresponding year last year. Latest reports keep production estimates in Vietnam at 1.35-1.40 lakh tonnes vs 1.0-1.10 lakh tonnes of the earlier estimates. Global exports expected to rise to 2.46 lakh tonnes vs 2.42 lakh tonnes in 2011 Indonesian production expected to rise to 41000 tonnes up from 33000 tonnes. Spot pepper dropped -132.95 rupees to 41955.25 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 43520/quintal while low of Rs 43000/quintal. Now support for the pepper is seen at 42963 and below could see a test of 42722. Resistance is now likely to be seen at 43483, a move above could see prices testing 43762.

Trading Ideas:

Pepper trading range for the day is 42722-43762.

Pepper ended higher on dwindling stocks and thin supplies in the domestic market

But an increase in supplies from Indonesia into the global market could weigh on sentiment.

NCDEX accredited warehouses pepper stocks gained by 26 tonnes to 1672 tonnes.

Spot pepper dropped -132.95 rupees to 41955.25 rupees per 100 kg in Kochi market.