The Hindu Business Line : Chilli futures hit upper circuit

Mumbai, May 3 Chilli futures hit the upper circuit for all contracts on NCDEX on Saturday following an outbreak of fire at the chilli market yard in Guntur. Futures gained on fears of damage to the stocks in warehouses but the ones accredited to NCDEX was unaffected.

“We had about 1,000 tonnes of goods, stored in eight-ten designated cold storages, that were not affected by the fire,” said an official. NCDEX had handled a maximum delivery of 16,000 tonnes in 2006, he added.

Chilli for June delivery was locked at the upper circuit of Rs 4,981 a quintal after seeing a low of Rs 4,768 a quintal, while the August contract rose to Rs 5,307 a quintal from a low of Rs 5,114. The October delivery closed at Rs 5,539 a quintal before touching a low of Rs 5,530.

The open interest was high at 20,800 tonnes for June contract, 8,250 tonnes for August and 1,225 tonnes for October.

Despite good export orders, chilli prices in Guntur have been falling the last couple of weeks due to shortage of good quality stocks. On Friday, spot prices fell Rs 25 to Rs 4,227 a quintal.

In the first eleven months of 2007-08, chilli exports rose 37 per cent to 1.69 lakh tonnes, compared with 1.23 lakh tonnes a year earlier.

Dwelling on the loss, Mr Sushil Sinha, General Manager, Karvy Commodities, said: “In last two months, farmers have lost about 20 per cent of total production of 14 lakh tonnes due to unseasonal rain in March. The recent fire will only add to their distress.”

Meanwhile, Karur Vysya Bank said it had provided loans to the tune of Rs 25 crore to chilli traders in Guntur. “The loans are fully secured against immovable properties and stock,” a bank official said.

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