Trade sources expect prices to recover during the next week on New Year demand.

The sources said that spot pepper prices declined drastically to the tune of Rs 400 per quintal during the first four trading days of the week following lack of overseas demand and Christmas sales by the growers.

They said the arrival of both old and new pepper shot up considerably during the pre-holiday trading sending the prices down. However, they expect the prices to recover in the next week.

"New Year demand is expected to harden the prices at least marginally", a trader said.

However, traders are of the view that long futures are likely to remain dormant in the short-run amidst reports of overproduction in all major producing countries.