Chilli prices shoot up on fear of crop shortage

KOCHI: With the main producing regions passing through a near-drought situation, the chilli market is generating heat. There has been a 40% rise in the prices of chillies in the past one year.

The sowing of the crop has been delayed in the main production centres mainly due to the deficient rains. And hence, there is an uncertainty about the crop prospects for the coming year.

Major exporters pointed out that though there are sufficient stocks in the current year the prices have increased to touch Rs 70 per kg in anticipation of a shortfall in supply in the next year���s output. The farmers and traders are holding on to stocks, they said. ���There is severe shortage for some varieties like Namdhari,��� they said. Last year during the same period the prices were at Rs 50 per kg.

Meanwhile, in the past couple of days there are reports of good rains from Guntur. Traders here pointed out that the sowing would pick up now. The good chilli crop in China is diverting demand from the local commodity sector.

Many exporters are understood to have opened offices in China to procure chilli and to meet their export demand. The prices were also low throughout last year. The new Chinese crop is expected to hit the market in September.

The exports of chilli from the country also took a severe beating in the current year due to the absence of Pakistan from the market. Last year, due to crop loss, Pakistan was actively buying from India. However, this time crop is considered to be good in Pakistan.

In the current year, chilli exports fell by almost 44% to a level of 37,500 tonnes in the April-June period. The value of exports also fell by 31% to a level of Rs 228.71 crore. Last year Pakistan alone imported about 22,000 tonnes in the first quarter of 2008-09. The total chilli exports stood at 188,000 tonnes last year.

Chilli accounts for 20% of the total spice exports in terms of value. In terms of quantity, the share stood at 40% of the total last year.