Despite dropping around 20 per cent this month on heavy arrivals, chilli prices are likely to gain in the near term on a lower crop.

Prices for the Guntur 334 best medium variety ruled at Rs 780 a quintal, while the superior variety ruled at Rs 830 a quintal on Wednesday.

On the National Commodities and Derivatives Exchange, April contracts increased Rs 130 a quintal to Rs 8,602. Prices on futures exchange have recovered over Rs 400 in the last two days.

“Prices have come off the highs this month as it is the time of peak arrivals. However, the crop seems to be lower,” said Mr Alapati Srinvasa Rao, a trader from Guntur.

Currently, arrivals are over 70,000 bags (45 kg each).

“Arrivals this week have really peaked at around 80,000-90,000 bags,” said Mr Nandyala Satyanarayana, an exporter.

However, arrivals are lower compared with last year when lakhs of bags arrived during the same time.

“The crop is at least 30 per cent lower than last year,” said Mr Satyanarayana, while Mr Rao pegged it even lower.

Chilli production averages around 13.5 lakh tonnes annually, and Andhra Pradesh accounts for over 7.5 lakh tonnes of this. This year, the crop was affected by untimely rain during December. Besides, it also caused a delay in the arrival.

This led to rise in prices since the beginning of the year with rates topping Rs 10,000 during the last week of February.

With carryover stocks being low, prices are expected to gather steam again.

“There should not be any surprise if prices touch Rs 10,000 a quintal again and scale even higher,” Mr Rao said.

export demand

Export demand is also good. “We are getting enquiries from all over,” said Mr Rao.

However, Mr Satyanarayana said demand from Bangladesh was lukewarm.

“But demand from Thailand is good,” he said.

During April-January of the current fiscal, chilli exports topped two lakh tonnes valued at Rs 1,255 crore against 1.63 lakh tonnes valued at Rs 1,056 crore during the same time a year ago.

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