Chilli prices continued to seek higher levels on delay in arrivals of new crop and all-round demand. The spot market also took cues from futures trading.

At the Guntur Agricultural Produce Marketing Committee yard, chilli was quoted at Rs 7,000 a quintal, while the superior Red New variety's modal price, or rates at which most trades took place, was Rs 7,200. Best quality chillies were quoted as high as Rs 9,900.

On the National Commodities and Derivatives Exchange, the February contract closed Rs 152 higher at Rs 8,780 a quintal. The March contract was up at Rs 9,352, a gain of Rs 350 over Tuesday's closing.

In the last fortnight, futures have gained over Rs 300 for February contracts and Rs 700 for March contracts. On the spot, prices have increased Rs 200 a quintal. “There is domestic and export demand for chilli. Late arrival of the crop is also pushing up prices,” said Mr Alapati Srinivasa Rao, a trader from Guntur.

“Export demand is good from countries such as Thailand, Russia, Bangladesh and Colombo,” said Mr Nandyala Satyanarayana, an exporter.

Usually, the new crop arrives by January-end, but this time unseasonal rain in November has resulted in arrivals being delayed.

“The new crop will arrive in March only. The arrival could be in the second week,” said Mr Rao.

l“The new crop that will arrive around March 15 is 20 per cent lower than last year,” said Mr Satyanarayana.

On Tuesday, arrivals were pegged at 20,000 bags (45 kg each) against 30,000 on Monday.

“Around this time, arrivals will be usually between 50,000 and 90,000 bags. In March, arrivals will be around 1.5 lakh bags,” said Mr Satyanarayana.

Mr Rao said prices are likely to rule firm until the new crop arrives. “After that, prices could drop,” he said.

The average annual production of chilli is 13 lakh tonnes, with Andhra Pradesh alone accounting for 7.5 lakh tonnes of it.

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