Chilli: Need to increase output

Chilli (Capsicum annuum) was introduced in the Indian sub-continent in the 16th century and has become an integral part of Indian culture and cuisine. Reported to have originated in South America, it is widely distributed in all tropical and sub tropical countries of the world.

Chilli is extensively used as spice in curries and as an ingredient in powder form for seasonings. Besides being used as natural colourant, it also has a tonic and carminative action. As a medicine, it is used as a counter irritant in Lumbago, Neuralgia, and rheumatic disorders. The enzyme isolated from chilli is used in the treatment of certain type of cancers. Oleoresin extracted from chilli is used in pain balms and vapour rubs.

Global output

With an estimated global production of 2.96 million tonnes (mt) in 2009, chilli is grown on an area of approximately 1.83 million hectares (mha) with an average global productivity of 1.62 tonnes a hectare. India is the leading producer of chilli contributing close to 43 per cent of world production followed by China (8.6 per cent) and Peru (5.6 per cent). However, the productivity in India is quite low (1.63 tonnes a hectare) in comparison with countries such as Cape Verde, Jamaica and Morocco, where yield levels are higher than 10 tonnes a hectare.

India scene

Total area under chilli cultivation in India is 0.8 mha with production of 1.35 mt (2008-09). Andhra Pradesh is the leading chilli producing State contributing to about 58 per cent of the country's total production. Karnataka is the second largest chilli producer (13 per cent) followed by Orissa (4.8 per cent), West Bengal (4.8 per cent), Maharashtra (3.6 per cent) and Gujarat (3.5 per cent).

Varieties grown

Major varieties grown in include Sannam, Byadagi, LC 334, Wonder Hot and Jwala. There are two major harvesting seasons, one in February-March and another season from September to December. While the domestic demand for chilli has consistently increased over the recent past, supply has remained stagnant, thereby, creating an upward rally in commodity prices.

Exports & imports

World trade of chilies stands at approximately 0.5 mt with an approximate value of $990 million. The US is the leading chilli importer accounting for nearly 20 per cent of the world imports followed by Malaysia (10 per cent) and Mexico (nine per cent). Top chilli exporting countries of the world are India (37 per cent), China (25 per cent) and Peru (11.5 per cent). Chilli contributes to about 40 per cent of total spice exports from the country. In 2009-10, chilli exports stood at about 0.2 mt. The major export destinations include Malaysia (23 per cent), Sri Lanka (17 per cent) and Bangladesh (14 per cent). Chilli powder, dried chillies, pickled chillies and chilli oleoresins are some of the forms in which this crop is exported. Guntur in Andhra Pradesh is the largest chilli trading market in the world with an estimated annual turnover of Rs 600 crore. It is estimated that about 40 per cent of the chilli traded in Guntur is stored in cold storages. Other major chilli markets include Warangal, Hindupur and Khammam in Andhra Pradesh, Raichur and Bellary in Karnataka and Unjha in Gujarat among others.

The Government has allowed future contract of commodities under the Forward (Regulation) Contract Act, 1952, and chilli futures are allowed to trade in exchanges such as NCDEX and MCX to mitigate price risk.

The domestic wholesale prices for chilli have almost doubled from last year and the global prices are reaching new highs. While chilli contributes significantly to the rural economy of the country, there is still immense potential to be tapped by plugging certain supply chain gaps. Measures need to be taken to increase chilli production to meet the growing global and domestic demand. There is an urgent need to reduce the post harvest wastages by adapting scientific storage, efficient transport, grading and effective packaging.

The author is Manager - Marketing & Corporate Communications, YES Bank.

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