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.