Traders buying red chillies at a steep Rs. 18,000-20,000 a quintal

With fresh arrivals of red chillis into agricultural marketing yards due only next February, there’s a sharp increase in the demand for the spices at cold storage facilities.

Traders are reportedly purchasing the commodity from cold storages at Rs. 18,500-20,000 a quintal in key markets such as Guntur in Andhra Pradesh and and Khammam in Telangana.

While there is no increase in the local retail markets, trade sources say the demand for the produce is seen increasing in neighbouring States such as Karnataka and Madhya Pradesh.

"In the retail market, we are selling mirchi (red chilli) at Rs. 180-185 a kilogram. This might go up slightly in the next one or two months. Prices might go down when fresh produce begins to arrive in the market yards," a retailer has said. For big farmers and traders who stored the produce in cold storage facilities, it seems to be a windfall as traders are buying it in large quantities at higher prices.

No benefit

"Farmers are not going to get any benefit as traders make all the money in these transactions. This phenomenon happens around this time of the year," T Sagar, General Secretary, Telangana Rythu Sangham, has said. "They buy the produce at Rs. 6,000 a quintal when the produce arrives, keep it in cold storage facilities and make money when the demand goes up," he said The cost of production of chillies is very high at Rs. 1.50-1.80 lakh an acre. "In order to be profitable, they should get at least Rs. 10,000-12,000 a quintal. But they end up getting only Rs. 6,000, leaving them in losses," he said. Because of heavy rains and a slight shift to cotton, acreage fell in Andhra Pradesh and Telangana this kharif season. In a normal year, Andhra Pradesh grows red chillies on 3.31 lakh acres and Telangana on 1.82 lakh acres. Both reported lower acreage for the commodity this kharif. While farmers in Andhra Pradesh grew the crop on 3 lakh acres, their peers in Telangana grew it on 1.11 lakh acres.

Chilli Prices hot on short supply and rising demand

Chilli prices are getting hotter due to supply squeeze and rising demand. The prices of the largest exported spice from India are hovering, 20 per cent more than the prices a year ago, and may race to a new high depending on the demand, trade insiders say.

Chilli crop was down by 15 per cent-20 per cent due to erratic rains last year. This along with high export demand in the end of 2014-15 seems to have dried up the stock.

The annual chilli production in the country is about 13-14 lakh tonne. Rising prices have led to hoarding, which in turn affects supply and boost prices further.

"About 75 per cent of the available stock is with the traders and only the rest is with the farmers," "Heavy purchase by China and Bangladesh last year has created pressure on the stock and has lifted the price.But if India gets good rainfall in the coming weeks, the prices will cool."

This time it remains to be seen how export will pan out. "The sowing for the next Chinese crop in October is high, indicating a better crop unlike last year. But China's domestic chilli consumption has gone up so much that its production is insufficient to meet the demand and hence they are forced to buy from other sources like India,"

Meanwhile, keeping with the national trend of opting for crops with high paying potential, farmers are expected to increase area under chillies.

There has been good demand for chilli seeds right from the onset of the monsoon across prominent chilli growing states

Chilli Teja Prices Improved In Futures On Strong Demand , 17th April 2014

Chilli teja prices improve in futures trading today as speculators created fresh positions on strong demand in the spot market against tight supply from producing belts.
At the National Commodity and Derivative Exchange (NCDEX), chilli teja for June delivery improved

Chilly Arrival Improved At Guntur Whole Sale Market, 17 December 2013

Chilly arrivals in the Guntur whole sale market, were reported at around 55,000 bags (40 Kg each), higher than Friday of 40,000 bags.

New crop arrivals are estimated at 5000 bags of the total quantity, while cold-storage stock supplies were at 50000 bags.

The spot price of LCA-334 variety was quoted at Rs 6000 -7000 per quintal, unchanged from the previous close.

On the NCDEX, the December chilly contract traded at Rs 7300 down 0.6% from Saturday close.

Spot Chilli Prices Dropped By 100/Quintal, 14 December 2013

Chilli arrivals in the key whole sale market in Guntur were reported at around 40,000 bags on Friday, lower thanThursday 50,000 bags.

Spot prices of LCA-334 variety down Rs 100 from the previous from the previous close. Inferior quality arrivals weighed down on prices of the spice despite the fall in arrivals. 

On the NCDEX, the chilli December contract traded at Rs 7270, up 0.6% from the Thursday close.

Chilli Prices Up By 20 Percent Due To Damaged Crop In MP , 20th November 2013

Chilli prices have increased by nearly 20 % in the last one month. Rain during July-October has damaged the crop in Madhya Pradesh. At least 80 % of the 1st picking of chilli crop was washed away by rains in the State.

The price of 334 grade chilli, at Guntur in Andhra Pradesh increased 

Export demand from Bangladesh, Malaysia, Sri Lanka and Indonesia also adding prices rise.

Chilli production in 2012-13 has been estimated at 12.99 lakh tonnes, down from 14.26 lakh tonnes a year ago

Red chilli expected to rule Around Rs 5,500-6,000 In Feb-Mar, 6 Novemer 2013

COIMBATORE

Farmers have been advised to take their sowing and planting decision on chilli with prices of red chilies expected to rule between Rs 5,500 and Rs 6,000 per quintal in February-March.

Normal production in the current year and good domestic and export demand will keep the prices rule at the same level as per an analysis carried out by Domestic Export and Marketing Intelligence Cell.

Cold stored samba chilli is trading around Rs 6,500-Rs 7,000 per quintal in Viruthanagar Market in Tamil Nadu.

India consumed around 70 to 80 % of its total production of 13 lakh tonnes and exported 20 to 30 % cent annually.

Andhra Pradesh share 53 % of total production of country, followed by Karnataka 8.23 %, West Bengal 7.69, Madhya Pradesh 7.20, Odisha 5.38, Gujarat 5.27, Maharashtra 3.51 and Tamil Nadu 1.77.