Pepper futures hit the 3 percent initial lower limit on profit booking, after prices had hit a record high last day. Prices have been rising for the last few days due to lower arrivals in major spot markets and delay in fresh crop supply from Vietnam.
Though low carryover stocks in the current year and reports that growers are holding their produce to get better returns are likely to add further bullish trend to the spice. Pepper production in India has been declining since a decade.
In 2012, India is likely to produce 43000 tonnes of pepper, down by nearly 10.5 percent from a year ago. According to data from IPC, global pepper consumption for 2012 is seen at 395,000 tonnes, while production is at 320,000 tonnes.
Outlook for the day is negative. We see support for the NCDEX March contract near Rs.37200 ($752.13, €569.06, £473.86) with resistance being Rs.40200 ($812.78, €614.95, £512.07).