Jaipur (Rajasthan) Commoditiescontrol - Red chilli prices are likely to firm up by August end due to the decline in stock as also from increased domestic and export market demand. As farmers have sold out their produce in the beginning of current season because the prices were better, available stock is cornered by financially sound traders who are not in hurry to sell. On the other hand, farmers are thinking of increasing chilli acreage because of prices hovering at higher level currently. However, actual sowing area is very poor due to deficient rain in Andhra Pradesh and Telangana. Chilli planting also delayed in Madhya Pradesh due to rain delay.
Red chilli 334 variety of average quality was sold at Rs 6,700-7,500 per quintal during arrival season. Current supplies of 334 variety red chilli is sourced from cold storage at anything between Rs 8,500-9,100 per quintal. Last year, the variety was sold at Rs 5,000-5,500 per quintal during arrival season and Rs 6,500-6,800 per quintal in later period. Similarly, red chilli of 341, 273 and DD varieties which are used for chilli powder making, was sold at Rs 7,000-7,500 during season and Rs 9,000-9,900 per quintal after season. Teja variety was sold at Rs 7,500-8,000 during season and Rs 9,500-10,000 per quintal after season. Last year, it was available at Rs 8,000-8,500 during season and Rs 10,000-10,500 per quintal after season.
Mr. Ashok Dattani from Dattani Enteprises, Mumbai told that red chilli prices will rise at the end of August due to the regular demand from the domestic and export markets. This would support market sentiments. Regular decline in chilli warehouse stock will also push up the prices. He told that farmers got higher prices in beginning of current season so they have offloaded maximum stock. Now, they have very little stock. Around 55-57 lakh bags (40 kg in each bag) stock is estimated in the entire Andhra Pradesh. However, some traders estimated stock at 70 lakh bags. But big traders and exporters do not agree with the figure.
Traders said that this year farmers were selling their produce regularly and traders were busy for stock building. Red chilli stocked in cold stores, is mostly owned by traders. As per estimates, out of total stock of 57 lakh bags, 10 lakh bags belong to actual consumers like processors who will never sell their stock but they will consume it. Next 10 lakh bags chilli is poor quality. But it will be sold in domestic market. Around 35 lakh bags chill is fine quality. Therefore, total availability will be 45 lakh bags. Market will have to wait for three months for new crop when new chilli will arrive in Madhya Pradesh. According to the traders, some stock of total 45 lakh bags is never sold at any price.
Dattani said that Ramzan month was over and trade inquiries have begun from Bangladesh, Iran and Malaysia. Chilli demand will rise from Sri Lanka, Europe, China and Gulf countries also. If Indian receives strong demand, the prevailing warehouse stock will not be sufficient enough to cater for export and domestic demand. Festival demand will increase in domestic market by the end of August when export demand will also be strong. According to traders estimate, red chilli prices will gain Rs 1,000-1,500 per quintal till the end of September. Chilli planting is delayed in Madhya Pradesh so arrival of the crop will be late by 20-30 days. Such delay will also support market sentiments.
Last year, chilli crop was very good in Madhya Pradesh when 95 lakh bags of chilli was estimated to produce in the state but pest attack and delay in rain reduced the crop to 28-30 lakh bags. Currently, chilli planting is under progress but sale of chilli seed declined 30 per cent in Nimar region. The state received rain recently so chilli planting delayed. New crop is likely to arrive in the market by October so final assessment will be possible during September. Around 1.60-1.75 crore bags production was estimated in Andhra Pradesh & Telangana during current season while production estimated to be 50-55 lakh bags in Karnataka and 5-6 lakh bags Maharashtra. Total production estimated at 2.5 crore bags. Carry over stock was nil at the beginning of the current season.
Mr Vineet Hundia from MN Enterprises, Guntur told that Indian market was likely to receive demand from Bangladesh in first week of August. Later, the demand will increased from Gulf countries. Domestic demand is very weak due to rainy season but it will improve before Raksha Bandhan. According to agriculture department of Andhra Pradesh, chilly was sown in 2,000 hectare in the state till 22 July. Chilli area was same corresponding period last year. Poor sowing was caused by deficiency in rain fall. In Telangana, the crop was sown in 1,000 ha which is very poor. Chilly is grown in 58,000 ha in the entire season.
India produces around 12-14 lakh tonnes chilli and contributes 45 per cent of total global production. Chilli prices trend lower level during January to March because of heavy arrival. Prices gain momentum in April-May due to lower arrival and better domestic demand. Normally, chilli arrival begins in October and continues till May end. Chilli crop arrives in October in Madhya Pradesh. Crop from Karnataka arrives in November while in December farmers from Maharashtra start bringing chilli to the market. In South, the arrival begins in January from Andhra Pradesh and Tamilnadu. Around 40 per cent chilli crop is dependent on rain in the country. The crop gets affected according to underground water level. Last year, chilli yield reduced 30 per cent due to lower water level in rain fed area.
Chilli is traded at $ 2.82/kg in international market which is better than last year’s $ 2.54/kg. According to Spices Board of India, 3.47 lakh tonnes chilli was exported in 2014-15 from the country, an 11 per cent increase compared to 3.12 lakh tonnes exports recorded during 2013-14.
(By Commoditiescontrol Bureau; +91-22-40015533)
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