Chilli turns cool on falling demand
Red chillies seem to be losing their spice with prices falling in the spot and futures market.
By NIDHI SHARMA, TNN |
MUMBAI: Red chillies seem to be losing their spice with prices falling in the spot and futures market. High stocks amidst low demand and indications of an increase in sowing acreage have combined to put downward pressure on prices.
On Monday, both August and September futures had hit the lower circuit on NCDEX and remained steady on Tuesday. The last traded price for July contract was down at Rs 3,700 per quintal, while the August contract was marginally up at Rs 3,825. The spot market at Guntur also moved down by Rs 200 per quintal at Rs 3,500-Rs 4,000 for the NCDEX traded variety.
According to corporate chilli analyst N Sriram, when prices went up to all time high at Rs 5,000 per quintal, farmers took land on high lease prices at Rs 10,000-12,000 against the normal lease prices between Rs 6,000-7,000 per acre to grow chillies. "The acreage under chillies is bound to increase by 15-20% with an yield of 2.5 tonne per acre," he said.
Chilli trader Ashok Dattani said that since sowing has started early, arrivals of the crop will start in next four months from Madhya Pradesh followed by other states. "Sowing in all the chilli growing states is up by 20-30% and if weather remains favourable country may produce 3 crore bags as against 2.4 crore bags produced earlier," Mr Dattani said. According to Mr Dattani, prices will go down by another 15-20%.
The stock position is very good and about one crore bags (each bag carries 40 kg) is available with 75 lakh bags in Andhra Pradesh cold storages, while demand is low. In the Guntur mandi, around 40,000-45,000 bags arrived on Monday and only 12,000-13,000 bags could be sold.
Kotak Commodity research analyst Faiyaz Hudani said that sentiment is bearish for chillies with market seeing good support for the August contract at Rs 3,800 levels.
On Monday, both August and September futures had hit the lower circuit on NCDEX and remained steady on Tuesday. The last traded price for July contract was down at Rs 3,700 per quintal, while the August contract was marginally up at Rs 3,825. The spot market at Guntur also moved down by Rs 200 per quintal at Rs 3,500-Rs 4,000 for the NCDEX traded variety.
According to corporate chilli analyst N Sriram, when prices went up to all time high at Rs 5,000 per quintal, farmers took land on high lease prices at Rs 10,000-12,000 against the normal lease prices between Rs 6,000-7,000 per acre to grow chillies. "The acreage under chillies is bound to increase by 15-20% with an yield of 2.5 tonne per acre," he said.
Chilli trader Ashok Dattani said that since sowing has started early, arrivals of the crop will start in next four months from Madhya Pradesh followed by other states. "Sowing in all the chilli growing states is up by 20-30% and if weather remains favourable country may produce 3 crore bags as against 2.4 crore bags produced earlier," Mr Dattani said. According to Mr Dattani, prices will go down by another 15-20%.
The stock position is very good and about one crore bags (each bag carries 40 kg) is available with 75 lakh bags in Andhra Pradesh cold storages, while demand is low. In the Guntur mandi, around 40,000-45,000 bags arrived on Monday and only 12,000-13,000 bags could be sold.
Kotak Commodity research analyst Faiyaz Hudani said that sentiment is bearish for chillies with market seeing good support for the August contract at Rs 3,800 levels.
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