Chilli prices surge as volume dips
The lower volumes indicate that there are more buyers than sellers in the market, as the price is expected to rise further.
By TNN |
MUMBAI: Following the massive fire in the Guntur chilli market on May 3, the volumes in the futures market have reduced to a trickle. While the prices have raised anticipating supply shortage after the accident, the market participation has taken a beating.
The chilli turnover on NCDEX was averaging at Rs 15 crore a day prior to the fire, and has come down to Rs 2 crore. The lower volumes indicate that there are more buyers than sellers in the market, as the price is expected to rise further.
Chillies futures price on NCDEX went up to Rs 5,300 per quintal on April 21 as supply of good quality chillies were low in the domestic market, even as export demand was strong. In the last week, chilli prices had eased to Rs 4,800 a quintal, but once again rose by over 8% in the last two trading sessions to Rs 5,111. Faiyaz Hudani from Kotak Commodities feels, taking into account that chilli had moved up to Rs 5,300, there is still room for an upside. He was, however, quick to add that participation would be low.The trade estimates the stock losses to be around Rs 50-60 crore.
However, government estimates it to be roughly around Rs 11 crore. According to N Sriram, ���I do not expect the losses to be higher than Rs 20 crore. The loss of around 2 lakh bags would amount to about two days��� arrival in the market.
The trade should recover soon.���
This discrepancy in the trade estimates could however, keep prices ruling high over the next few weeks, he pointed out. The spot market will be operational in the next 10 days with the government setting up temporary market yards.
As there is no spot market to take cues from, the futures price would trade once again on sentiments.
The chilli turnover on NCDEX was averaging at Rs 15 crore a day prior to the fire, and has come down to Rs 2 crore. The lower volumes indicate that there are more buyers than sellers in the market, as the price is expected to rise further.
Chillies futures price on NCDEX went up to Rs 5,300 per quintal on April 21 as supply of good quality chillies were low in the domestic market, even as export demand was strong. In the last week, chilli prices had eased to Rs 4,800 a quintal, but once again rose by over 8% in the last two trading sessions to Rs 5,111. Faiyaz Hudani from Kotak Commodities feels, taking into account that chilli had moved up to Rs 5,300, there is still room for an upside. He was, however, quick to add that participation would be low.The trade estimates the stock losses to be around Rs 50-60 crore.
However, government estimates it to be roughly around Rs 11 crore. According to N Sriram, ���I do not expect the losses to be higher than Rs 20 crore. The loss of around 2 lakh bags would amount to about two days��� arrival in the market.
The trade should recover soon.���
This discrepancy in the trade estimates could however, keep prices ruling high over the next few weeks, he pointed out. The spot market will be operational in the next 10 days with the government setting up temporary market yards.
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Mumbai-based chilli trader Ashok Dattani said, ���The support level of Rs 4,725 per quintal was a good level that the market achieved, after which it started moving up. The market is likely to rise further tomorrow, and investors will look to book profits from Rs 5,300 levels.���As there is no spot market to take cues from, the futures price would trade once again on sentiments.
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