Chilli prices continued to drop on the spot and futures market on higher arrivals from warehouses on Wednesday. However, export demand continued to provide a cushion to the spice from the fall it has been witnessing since the last one month.

In fact, support from exports at the main terminal market in Guntur seemed to be pushing up prices despite higher arrivals. At the Guntur Agricultural Produce Marketing Committee yard, the modal price or the rate at which most trades took place was up Rs 500 at Rs 7,000 a quintal for dry chilli red. Arrivals were 137.5 tonnes against 67.2 tonnes on Tuesday. Quality chilli commanded as high as Rs 7,500 for the variety. In case of dry chilli red top, quality produce fetched Rs 12,500 a quintal.

On the National Commodities and Derivatives Exchange, July and August contracts slipped by a little over Rs 50 a quintal. Chilli for July delivery ended at Rs 8,090 a quintal, while August delivery closed at Rs 8,284 a quintal.

According to Mr Anand James, Chief Analyst of Geojit Comtrade, chilli prices are witnessing a downtrend on poor domestic demand and higher arrivals in the spot market. Improvement in overseas demand from Sri Lanka, Thailand and Malaysia have been holding prices from falling further.

Market sources put total stock in Guntur warehouses at around 47-48 lakh bags (45 kg each). Of this quality produce is estimated at 30-35 lakh bags. Chilli production averages around 13.5 lakh tonnes (lt) annually. Andhra Pradesh accounts for over 7.5 lt of the total production in the country.

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