The Hindu Business Line : Chilli prices soar on fear of delayed arrival

Hot property
Lower yield, sudden export demand spurt behind rise
Per-quintal price touches Rs 6,800 levels
Heavy rains have decimated crop in M.P., Maharashtra

Guntur , Sept 15

Chilli prices have shot up in recent weeks at the Guntur market yard, the biggest in the country, with per-quintal price this week having gone up to Rs 6,800.

According to trade sources, the drastic jump in prices can be attributed to lower yields last year (20-30 per cent), coupled with the anticipated late arrival of the new crop, sometime in February 2007.

A sudden spurt in export demand, especially from Bangladesh, is said to be another contributory factor.

Bangla demand

Currently, an estimated 20 lakh bags of chilli are in the cold storage units here, of which seven lakh bags are held by the National Commodity and Derivatives Exchange Ltd and two lakh bags by exporters.

Leaving out three lakh bags of white chilli, only eight lakh bags of red chilli are left for trading in the open market for domestic consumption.

Lower arrivals

Market yard officials said only 13.78 lakh bags have come to the yard since June during the current fiscal, less than the usual number of 15 lakh or more.

Heavy rainfall in Madhya Pradesh and Maharashtra in recent months is said to have caused extensive crop damage, pushing up the demand for the crop in the Guntur cold storages.

The second crop in those States usually arrives in October.

An unexpected demand for 15,000 tonnes from Bangladesh has also contributed to the scarcity.

Usually, Guntur chilli is exported to Sri Lanka, the Gulf and the US. Malaysia also imports chilli from the State.

Availability

According to Mr. K. Rosaiah, President of the Guntur Chilli Merchants' Association, at this time of the year usually 50 lakh bags are is available in the State markets, the bulk of them in the Guntur yard and the rest in the other yards.

"But now, hardly half the quantity of chilli is in the market and hence, the spurt in prices," he added.

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