Pepper March contract gained Rs 520 and settled at Rs 36210/quintal on depleting stocks and thin supplies though expectations of higher production and sluggish exports capped the gains. Clearer skies in Kerala enabled arrivals to pick up in markets. Demand however is expected to pick up-mainly from North India in coming weeks that could support the market sentiments. Pepper output is likely to be higher this season as good yields are expected from the top-producing states of Kerala and Karnataka. Pepper arrivals decreased to 320 quintals from 670 quintals and offtakes slumped to 300 quintals from 650 quintals. IPC estimates the total global production during 2013 at 3.17 lakh tonne and exportable surplus at 3.19 lakh tonnes respectively. International Pepper Community projected production and export estimates of pepper in 2012 would be around 324,000 mt and 249,000 mt respectively, as against 317,700 mt and 246,200 mt in 2011. Taking into account of stock brought forward from 2011, import and domestic consumption in 2012, around 85,750 mt would be carried forward as stocks for 2013. Local pepper is expected around 50-55 thousand tonnes in 2012-2013 against 43,000 tonne in 2011-12. Indonesian crop is projected higher. Spot pepper dropped -172.05 rupees to 40181.25 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 36300/quintal while low of Rs 35450/quintal. Now support for the pepper is seen at 35673 and below could see a test of 35137. Resistance is now likely to be seen at 36523, a move above could see prices testing
36837.

Trading Ideas:

Pepper trading range for the day is 35137-36837.

Pepper gained on depleting stocks and thin supplies though expectations of higher production capped gains.

Demand however is expected to pick up-mainly from North India in coming weeks.

Clearer skies in Kerala enabled arrivals to pick up in markets.

Spot pepper dropped -172.05 rupees to 40181.25 rupees per 100 kg in Kochi market.