Pepper September delivery dropped Rs 89 and settled at Rs 33245/quintal on some selling pressure after recent gains though lower supplies in the domestic market and depleting stocks restricted the downside. There are anticipations of a further rise in export and domestic demand, and lower stocks and lower global production reports. But traders do anticipate some moderate fall in rates from these higher levels for the demand to pick up substantially again. Exports and domestic demand from North India remained good. Demand from North India too has been regularly there ahead of the Festive season. IPC has predicted 2011 crop to be lower by 2% at 309,952 MT. Carryforward stocks are expected to decline marginally to 94,582 MT vs 95,442 MT. Global exports have declined by 11% to 237,650 MT. Indian production expected to decline to 48,000 MT. Vietnam is having low stocks as per reports. The production there too is expected to fall this year as per some estimates. Brazil and Indonesian crop expected to be lower. Low carryover stock in Brazil and Indonesia is likely to raise exports here in coming months. Spot pepper gained 48.95 rupees to 32213.65 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 33580/quintal while low of Rs 33050/quintal. Now support for the pepper is seen at 33003 and below could see a test of 32762. Resistance is now likely to be seen at 33533, a move above could see prices testing 33822.

Trading Ideas:

Pepper trading range is 32762-33822.

Pepper dropped on some selling pressure after recent gains though lower supplies in the domestic market

There are anticipations of a further rise in export and domestic demand

NCDEX accredited warehouses pepper stocks gained by 20 tonnes to 4250 tonnes.

Spot pepper gained 48.95 rupees to 32213.65 rupees per 100 kg in Kochi market.