Short covering supported the sharp gains in the black pepper futures for the second day amid strong domestic demand against the projected lower crop. The NCDEX Black Pepper for the May delivery zoomed nearly Rs 1,155 to the session high of Rs 38400 per quintal. The counter ended the day up by Rs 880 or 2.36% at Rs 38125 per quintal. The open interest in the counter dipped by 3% to 4,122 tonnes, indicating short covering and the volume traded surged to 4,596 tonnes from 2,384 tonnes. 

Based on International Pepper Community (IPC) 2012 forecast, there would be a projected global shortfall of nearly 51,000 tonnes this year. While world production would increase by more than 21,755 tonnes or 7.3% to 320,155 tonnes from 298,400 tonnes in 2011, global consumption could grow by 7,550 tonnes to 371,000 tonnes from 363,450 tonnes last year.

Indian pepper output during the new crop season in 2012 is estimated to be around 43,000 tonnes, which is lower by around 5,000 tonnes than the previous crop of 48,000 tonnes (10.42 per cent decline). However, the trade sources are of the opinion that the new crop would be further lower due to shrinking acreage, declining productivity in general, and particularly during this season due to changing rain pattern during the spike setting stage.

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