Pepper August delivery dropped Rs 394 and settled at Rs 28100/quintal due to profit booking at the higher levels, the commodity prices has witnessed good upmove in last few sessions on reports of firm international markets along with reports of lower production. However, traders have been waiting for dips for fresh buying and that may support the prices. The strong domestic demand against the tight supply in the domestic market is bullish for pepper in long term. 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. Spot pepper gained 51.3 rupees to 27666.65 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 28590/quintal while low of Rs 27987/quintal. Now support for the pepper is seen at 27861 and below could see a test of 27623. Resistance is now likely to be seen at 28464, a move above could see prices testing 28829.

Trading Ideas:

Pepper trading range is 27623-28829.

Pepper dropped due to profit booking at the higher levels

Pepper looks to test support at 27861 and resistance is seen at 28464.

NCDEX accredited warehouses pepper stocks rose by 24 tonnes to 4196 tonnes.

Spot pepper gained 51.3 rupees to 27666.65 rupees per 100 kg in Kochi market.