The Hindu Business Line : Chilli prices fall on bumper crop estimates

In a nutshell
March delivery on NCDEX has fallen by Rs 650 per quintal
In Guntur spot markets, prices have fallen from Rs 7,100 per quintal Rs 3,800 per quintal

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Mumbai Feb. 20 Apart from sugar, chilli is among the few commodities, whose prices have fallen steeply in line with the Union Government's bumper crop estimates. Chilli prices have been moving downwards on improved arrivals in Guntur markets. March delivery on NCDEX has fallen by Rs 650 per quintal from Rs 4,497 on February 1 to Rs 3,834 on February 19. In Guntur spot markets, prices have fallen from Rs 7,100 a quintal in December to Rs 3,800.

"Offloading of old stocks along with new arrivals is aiding the downward pressure on prices. The fall in prices was expected given the bumper production estimates this rabi season," said Mr Satish Agarwal, a wholesale dealer.

Output forecast

The country is expected to produce 10-12 lakh tonnes in 2007 against 65,000 tonnes last year. Most of the farmers shifted to chilli due to higher price realisation last year. About 35 per cent of kharif crop was washed off due to floods in Andhra Pradesh in September 2006. Karnataka and Maharashtra also witnessed a sharp fall in output due to unseasonal rains resulting in a total output loss of 40 per cent.

"Exporters are still to enter the market as they expect the prices to fall further when the produce starts flowing in Madhya Pradesh and Karnataka by middle of February. The prices can reach anywhere between Rs 3,000-Rs 3,300 per quintal," said Mr Harish Galipalli, head of research, Karvy Comtrade.

Export data

Chilli tops the list of spices exports from India contributing about 31 per cent by volume and 17 per cent by value. Between April and October 2006, the country exported 66,250 tonnes valued at $71.25 million (Rs 320 crore).

India exports chilli in different processed forms such as chilli powder, dried chillies and pickled chillies and it is mainly exported to the US, Sri Lanka, Bangladesh, West Asia and the Far East.

Chilli is exported mostly to Sri Lanka, South Africa, Nepal, Mexico and Bangladesh. In 2006, China also imported huge quantity from India on the back of poor crop and good demand in their markets.