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Chilli

Chilli is one of the most important and the largest produced spice in India and India its pale of pride in chilli production as well as exports. Chilli is reported to have originated from South America and was believed to be introduced to the rest of the world by Columbus. Chilli is also referred as hot pepper, red pepper, cayenne pepper, capsicum, etc. Most of the cultivated varieties in India belong to the species Capsicum annum.
Chillies are reported to have cultivated in Peru since pre-historic times. Nevertheless, India has now become the largest producer as well as the exporter of chillies in the world. Indian chillies are known for their pungency and colour particularly grown Guntur district of Andhra Pradesh state. It is estimated that around 25-30% of the chilli crop is used for powder preparation.
The large sized and mild form varieties are called bell peppers or paprika or capsicum in different countries and are used primarily as vegetables.
 
 
Economically Important Products:
 
The fruit is actually called chilli and is used as a spice in a variety of cuisines all over the world in different forms as green chillies, dried red chilies as a whole or in powdered form.
The fruit/chilli contains capsaicin, which gives a strong burning tangy sensation when eaten and the red colour is because of the presence of pigment capsanthin. Chillies are valued based on their high pungency and colour.
 
 
Climate and Cultivation
 
Chilli is grown in both tropical and sub-tropical climate as it comes up well in warm humid climate with an optimum temperature of 20o to 25o C. It is grown as a rainfed crop at an annual rainfall of 25-30 cm. However, excessive rainfall is harmful to the crop causing defoliation. Although it can be growth on all types of soils, it is best suited for sandy loams and clay loams with proper drainage.
Chillies are grown throughout the year at one or the other parts of the country for vegetable purpose. Chill is grown both in kharif and rabi seasons. The crop planting starts from July-August and extends till October. Crop takes around 180-200 days for maturity. Green chillies are harvested at regular intervals for vegetable purpose. Fully ripe chillies are harvested at the maturity for the production of dry red chillies.
 
Seasons and crop calendar

 
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Kharif
 
 
 
 
 
 
 
 
 
Rabi
 
 
 
 
 
 
 
 
 

 

 
 
Sowing 
 
 
Harvesting

 
 
World Scenario
 
World chilli production is primarily concentrated in South Asian countries to an extent of about 55% of total world production. India is the single largest producer contributing for about 38% followed by neighbors China with 7%, Pakistan and Bangladesh contributing for about 5% each. Rest of the output is spread across South American countries and African countries.
 
 
 
Further, India is the largest exporter of chillies, meeting nearly half of the world’s consumption demand. Apart from India, China also exports to an extent of about 19% of total exports chilli exports in the world. Peru contributes for nearly 9%, while Spain is the fourth largest exporter in the world as per the data provided by the FAO. Rest of exports are scattered across a number of countries each contributing in minor quantities.
 
Table 1: Top five trading countries in the world

Importers
%
Exporters
%
U.S.
24
India
50
Malaysia
12
China
19
Sri Lanka
9
Peru
9
Spain
8
Spain
7
Germany
4
Mexico
2

Source: FAOSTAT
 
 
Major importers include the U.S. with about 24% followed by Malaysia with 12% and Sri Lanka with 9% of total imports in the world. Interestingly, Spain is not only fourth largest exporter but also the fourth largest importer as well.
 
 
Domestic Scenario
 
India, as observed in the earlier section, is the largest producer, consumer and exporter of chillies in the world. India produces on average 1.3 to 1.5 million tonnes of red chillies annually. India is the largest consumer of chilli in the world. Nearly 80% of India's production is consumed within the country and only about 15-20% of domestic production is exported.
 
Trends in area and production during the last two decades indicate that there is a significant rise yields per hectare particularly from 2003-04 onwards and it has led to a sharp increase in production level from less than one million tonne to 1.2 million tonnes in late 2000s. However, Area under chilli cultivation has largely remained the same hovering around 8 lakh hectares throughout 2000s and after.
 
 
 
 
State wise production
 
Chilli is cultivated in almost all the states in India but, Andhra Pradesh is the largest producer accounting for more than 50% of total chilli output n the country.  Karnataka is the second largest producer contributing for about 10-15% of total production in the country. Rest of the output is spread across a number of states including Maharashtra, Orissa, Rajasthan and Tamil Nadu.
 
 
 
 
Important varieties
There are several varieties of chilli cultivated in India. The most popular among them are, Guntur Sannam, LC 334, Byadgi, Jwala.
 
 
 
Major Markets
 
Spot markets:
Andhra Pradesh: Guntur, Warangal, Hindpur, Khammam. Guntur is Asia's largest market for chillies.
Karnataka: Raichur, Bellary
 
Futures markets: Chilli futures are traded on NCDEX.
 
 
 
External Trade
 
Exports of chillies from India have increased during past 10 years and on average they stood at about 2.2 lakh tonnes per year. Chilli is exported either as dried chillies or in powdered form. 
 
Major export destinations: Malaysia, Sri Lanka, Pakistan, Indonesia, U.S, Bangladesh, UAE, China, Thailand, Mexico, United Kingdom , Saudi Arabia, Singapore and Germany.
 
 
Major import sources: NA
 
 
Factors influencing prices
 
  • Crop condition and output expectations: Extent of area sown under the crop, condition of the crop and output expectation.
  • Rainfall and weather conditions that could affect the crop output.
  • Domestic demand expectation: Any changes in demand both domestic as well as international markets. 
  • Stocks available in the market. 
  • External demand and supply: Demand supply situation in major import sources. 
  • Trade policies: Any change in government policy relating to change in tariffs etc.,
 

 

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