The Hindu Business Line : Chilli prices may strengthen

Chennai, Aug 12 Chilli prices may strengthen in the short-term but weaken in the long term. Stockiest are anticipating good demands from the overseas as well as domestic market in the coming weeks on the occasion of festivals ahead, thereby keeping the prices firm.

Demand is expected to come in from Bangladesh, Malaysia and Sri Lanka, according to the Mumbai-based Angel Commodities Broking Ltd. But ample stocks in the mandis at Guntur are likely to cap the prices.

Guar seen firm

Last week, chilli September contracts witnessed a mixed sentiment. It opened weak but picked momentum towards the end of the week. It traded in the range of Rs 4,621-4,297 a quintal. Spot prices in Guntur ruled steady to firm. Demand is expected basically from Bangladesh, Malaysia and Sri Lanka. But contrary to this there are comfortable stocks at the Guntur mandis, which will cap the prices at the higher levels. Thus for the long term (November-December) the prices may weaken whereas in the short term (September-October) the prices may strengthen.

The firm said guar futures were likely to rule firm on reports of damage to the standing crop in Ganganagar, Rajasthan, besides insufficient rains in the growing belts. Though guar gum exports could be hit in the short-term following a recent alert issued by the EU food safety experts on high dioxin contents in the gum shipments from a supplier, the issue could be settled soon.

Despite rains in Western parts of Rajasthan since the start of the week, guar prices have been climbing at a steady pace as market considers the downpour to be ineffective to make impact on sowing. Last week, September contract traded in the range of Rs 1,674-1,823 a quintal.

Any increase in production is possible only if the targeted sowing is completed by August 15.

Any further delays would open chances for a lower yield which could subsequently limit the supplies, the broking firm said. Among other commodities, prices of refined soyabean oil are expected to be range-bound.