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Suresh P. Iyengar

Mumbai, Aug. 3 The sharp fall in chilli arrivals in the Guntur spot markets and rising export demand may push up chilli prices in the short term.

According to market estimates, stock with farmers will exhaust within a fortnight.

Arrivals from the new crop are expected to hit the market only in February.

Inventory in the cold storages has fallen from 48 lakh bags last month to 40 lakh bags due to strong export demand from Sri Lanka, Malaysia and the US for good quality such as Badgi and Teja Aswhini.

Domestic demand for high pungency varieties such as LCA 334 and Sannam is also fast picking up.

“The market witnessed a shortfall of good quality chilli due to unseasonal rains in the growing region of Andhra Pradesh,” said an analyst. Chilli exports in the first two months rose 21 per cent to 50,000 tonnes in the fiscal ’09.

After the recent rains in Andhra Pradesh and Maharashtra, sowing activity has picked up albeit in a slow pace.

Despite better realisation, the acreage under chilli cultivation may not go up drastically this crop season because of heavy losses incurred by farmers due to crop damage last year.

“Prominent chilli growing regions like Andhra Pradesh, Karnataka, and Maharashtra have received low rains from June to mid-July affecting the chilli acreage. However, the situation is set to improve with the progress of monsoon,” he said.

Insufficient rain in the last two months has pushed up chilli prices, but it started correcting with the revival of monsoon in Maharashtra and Andhra Pradesh in mid-July.

Making most of the price rise, farmers offloaded about 50,000 bags a day, thus preventing abnormal rise in prices.

From Rs 5,451 a quintal on July 2, the prices have touched a high of Rs 6,262 a quintal on July 19 and fell thereafter to Rs 5,767.

However, it has started moving up during the last one week and closed at Rs 5,821 a quintal on Friday.

With the shrinking arrivals, prices are expected to resume their upward journey both in the spot and futures market.

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