MUMBAI (Commoditiescontrol) - Uptrend may continue in red chilli prices due to thin stock, low supplies from producing areas and closure of the key Guntur mandi for 1-month summer holiday.
Guntur is the largest red chilly market in the country and due to summer, it is closed for one month during May-June every year.
This year, the production of chilli has decreased because the farmers had sown in lower areas. Last year, the farmers had suffered huge losses due to decline in prices owing to the bumper production.
India is the biggest contributor to the international market. By exporting 353,400 tonnes, chilli earned Rs 3,241.83 crore in April-December 2017 as against 260,250 tonnes and Rs 3,460.83 crore respectively during the same period in 2016.
Stocks of cold storages are being available at markets as less produce is bringing by the farmers. Buyers are also showing interest in cold storage stock owing to its good quality.
Due to the increase in consumption year after year, the demand for red chilli is increasing in the market but the production figures are stagnant. Demand is also increasing for exports as the result available stock is not sufficient to meet supply.
At this time due to lack of availability of high quality stock in the production areas, there is tremendous demand for good quality stock in the market. In the coming time, shortage of good quality stock may push demand for medium and medium quality stocks.
Also, the stock of most selling Teja quality in the market is seen to be the lowest this year, due to which the market can stay warm in the coming time.
Demand for red chilli (mainly Teja, 334 and 273) from Dubai, Bangladesh, and other countries is being seen good. Good demand was seen in red chilli till last month due to Ramadan.
Meanwhile traders are waiting for the monsoon. As per the India Meteorological Department (IMD), the southwest monsoon is expected to hit Kerala on May 29, three days ahead of its normal onset date.
Sowing of most of the spices generally starts after monsoon rains. The first advance estimates released by the Ministry of Agriculture had earlier showed that during the year 2017-18, spices production in India remained stable at 8.16 million tonnes.
India is the world's largest producer of red chilli. India accounts for around 50% of the world's production, so due to low production in India's this year will have an impact on the global market, which could make the prices high.
India exported about 7.97 lakh tonnes of spices and spice products worth Rs 13,167.89 crore during April-December 2017, an increase of 20 percent in volume and four percent in Rupee terms. During the corresponding period in 2016, 6.63 lakh tonnes valued at Rs 12,607.46 crore was exported, a Spices board press release said. In Dollar terms,spices exports were pegged at USD 2041.23 million as compared to USD 1880.02 million, notching an increase of nine percent in value.
(By Commoditiescontrol Bureau; +91-22-40015567)
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