Pepper October contract gained Rs 890 and settled at Rs 43680/quintal on strong demand against the tight supply in the local markets. The global pepper market showed some improvements during the last week. India's total production of pepper is likely to decline by almost 5000-6000 tonnes from the previous estimates of 43000 tonnes to 36000 tonnes due to early rainfall in major pepper growing regions which might reduce the pepper productivity in the current year. Despite the increase in the global pepper production, International Pepper Community projected there will be global shortfall of nearly 51,000 tonnes this year. This is due to the strong growth projected in the global pepper consumption. Prices are likely to face some selling at higher levels due to the weak export demand for Indian parity due its higher prices in the global markets. New crop from Indonesia is likely to reach in the market from mid September and crop size is expected to normal during the year. As per the latest updates from the General Statistics Office of Vietnam, the country has exported nearly 84,000 tonnes of pepper valued 576 million USD during the first eight months of 2012. Spot pepper gained 349.75 rupees to 41144.45 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 43825/quintal while low of Rs 42710/quintal. Now support for the pepper is seen at 42985 and below could see a test of 42290. Resistance is now likely to be seen at 44100, a move above could see prices testing 44520.

Trading Ideas:

Pepper trading range for the day is 42290-44520.

Pepper gained on strong demand against the tight supply in the local markets.

The global pepper market showed some improvements during the last week.

NCDEX accredited warehouses pepper stocks dropped by 10 tonnes to 3285 tonnes.

Spot pepper gained 349.75 rupees to 41144.45 rupees per 100 kg in Kochi market.