Chilli turns hot as prices climb north
Red chilli prices are shooting up as arrivals in the Guntur market are much lower than expected. March, April and May are considered the peak season for chilli arrivals.
By Deepa Krishnan, TNN |
MUMBAI: Red chilli prices are shooting up as arrivals in the Guntur market are much lower than expected. March, April and May are considered the peak season for chilli arrivals. Currently arrivals into the market are much lower at 40,000 bags (of 40 kg) to 60,000 bags a day compared to the peak season average of 75,000 to one lakh bags daily.
There is no carryover stock in both the primary market, Guntur and consumption markets, Delhi, Agra, Bareilly, Kanpur, Calcutta and northeastern states.
According to N Sriram, a corporate chilli consultant to farmers’s society, Good Earth and Good Health Foundation: “Initially, the crop was expected to be good and prices were tipped to be between Rs 3,000 and Rs 3,500 quintal.
However, due to labour shortage in harvesting chillies owing to celebration of Shivaratri, and erratic weather, the crop has been delayed. There is a current shortage of 15-20% in the yield.”
There is strong demand in both the international and domestic market for chillies this year. A Mumbai-based trader said, “This year China’s crop is lower and they would import from India. We may have to cater to regular Chinese markets like Japan and Korea.”
Arrivals in the market are therefore thinner than usual. In addition, Mr Sriram pointed out that farmers would not undertake distress sales this year as they had good financial returns from cotton, the other crop they grow. They are not expected to sell chillies unless they get a good price.
The price has moved up by Rs 3 per kg on Monday to close at Rs 45 from Friday’s close. The price is up on NCDEX as well. The March contract closed at Rs 4,511 per quintal from Rs 4,345 on Saturday.
In the last week, the price has gone up from Rs 38 per kg to Rs 45. The price is expected to touch Rs 48 in the next week, analysts point out. Ashok Dattani, a Mumbai-based trader said, “The crop is expected to be 1.35 crore bags this year.
The annual average production is between 1.25 lakh bags and 1.5 lakh bags. Because of the unusually low production of 75 lakh bags last year, there is no carry over stock and demand is expected to be good.”
There is no carryover stock in both the primary market, Guntur and consumption markets, Delhi, Agra, Bareilly, Kanpur, Calcutta and northeastern states.
According to N Sriram, a corporate chilli consultant to farmers’s society, Good Earth and Good Health Foundation: “Initially, the crop was expected to be good and prices were tipped to be between Rs 3,000 and Rs 3,500 quintal.
However, due to labour shortage in harvesting chillies owing to celebration of Shivaratri, and erratic weather, the crop has been delayed. There is a current shortage of 15-20% in the yield.”
There is strong demand in both the international and domestic market for chillies this year. A Mumbai-based trader said, “This year China’s crop is lower and they would import from India. We may have to cater to regular Chinese markets like Japan and Korea.”
Arrivals in the market are therefore thinner than usual. In addition, Mr Sriram pointed out that farmers would not undertake distress sales this year as they had good financial returns from cotton, the other crop they grow. They are not expected to sell chillies unless they get a good price.
ADVERTISEMENT
The price has moved up by Rs 3 per kg on Monday to close at Rs 45 from Friday’s close. The price is up on NCDEX as well. The March contract closed at Rs 4,511 per quintal from Rs 4,345 on Saturday.
In the last week, the price has gone up from Rs 38 per kg to Rs 45. The price is expected to touch Rs 48 in the next week, analysts point out. Ashok Dattani, a Mumbai-based trader said, “The crop is expected to be 1.35 crore bags this year.
The annual average production is between 1.25 lakh bags and 1.5 lakh bags. Because of the unusually low production of 75 lakh bags last year, there is no carry over stock and demand is expected to be good.”
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
