The Hindu Business Line : Chilli output may miss target, prices likely to soar

NEW DELHI: The chilli production in the country is likely to miss not only the projected target of 12 lakh tons in 2007-08, but it could be below the last year's level as well, as untimely rain has damaged 20-25 per cent of the crop, sources in Spices Bo ard said.

Market analysts who have pegged the loss at 15-20 per cent due to the rain said below-than-expected output could send the prices soaring in near-term. "Andhra Pradesh is the worst hit by rains, where the crop damage is estimated to be higher compared to Karnataka and Tamil Nadu. We expect the total loss to be about 20-25 per cent," a Spices Board senior official who does not want to be said.

"Last year, production stood at 10.5 lakh tons while this year we may achieve only 70,000 tons" the official said, adding that the rain has affected both standing as well as harvested crop.

"Our field person is gauging the actual loss and the picture would be clear in another two days," he added. However, market analysts have pegged the crop less at 15-20 per cent. Karvy Comtrade analyst Mr Veeresh Hiremath said, "Even though production was expected to be higher this year, rain in January, and it is raining even now, is affecting the crop. According to reports, there may be about 15-20 per cent of crop loss." He said heavy rains are disturbing the chili supply in the market. Arrivals have declined to 40,000 bags from 1.3 lakh bags today. While the volumes on exchanges have slipped to 50 lots as compared to 300 lots on an average trading day. Besides supply, the quality has also affected and added that all these have prompted prices to mov e northward today.

Prices have hit the four per cent upper circuit both at spot and futures market, he noted. - PTI

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