Pepper October contract dropped Rs 190 and settled at Rs 42950/quintal tracking bearish cues from other spices, poor exports and on improved rains. Pepper prices are correcting due to lower export demand at higher prices. The global pepper market was stronger and prices increased at all origins during the past week, according to weekly updates from IPC. In Lampung and Belem, Brazil the market was active and price of black pepper at these sources rose by 5-6% locally this week, while for fob increased by 3-4%. In Vietnam, local price increased daily during the week to reach VND 129,000 per kg from VND 123,500 at the beginning of the week. Indian pepper futures were highly volatile during the week with prices shooting up till the mid of the week on bargain buying and give up the gains towards the end of the week. The market closed with marginal gains over the last week. New crop from Indonesia is likely to reach in the market from mid-September and crop size is expected to normal during the year. Overseas buyers have been placing orders with other origins such as Indonesia and Brazil to take the benefit of lower prices. Exports have been poor because Indian-origin pepper is offered at a premium in the global market compared with competitors. Spot pepper dropped -337.35 rupees to 41067.65 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 43200/quintal while low of Rs 42700/quintal. Now support for the pepper is seen at 42700 and below could see a test of 42450. Resistance is now likely to be seen at 43200, a move above could see prices testing 43450.

Trading Ideas:

Pepper trading range for the day is 42450-43450.

Pepper dropped as higher prices dampened demand while improved rains also weighed

The global pepper market was stronger and prices increased at all origins during the past week

NCDEX accredited warehouses pepper stocks gained by 10 tonnes to 3288 tonnes.

Spot pepper dropped -337.35 rupees to 41067.65 rupees per 100 kg in Kochi market.