Chilli prices up 10% in a month as AP sowing falls

Chilli prices have increased more than 10 per cent in one month due to a 60 per cent decline in sowing area in the principal growing region of Andhra Pradesh and diminished arrivals from Madhya Pradesh, exporters said. “The crop is down by 50 per cent due to virus attack,“ said AP Murugan, director at Paprika Oleos (India), a major exporter of the commodity. Chilli is the largest exported spice from the country with earnings of more than Rs 5,000 crore annually.

Prices of best variety chilli now stand at Rs 95 per kg, up from Rs 85 per kg last month, traders said. The prices had plummeted to Rs 35 per kg early this year after glut.

A one month long strike in Guntur, the chilli hub of the country, against implementation of electronic trading system, from September helped lift the prices last month. Traders also said chilli arrivals from Madhya Pradesh are poor though the state is not a large enough producer to make a significant impact on the country's total output. Madhya Pradesh produces around 1lakh tonnes of chilli, while the country's total output crossed 18 lakh tonne in the last season.

Chilli exports have been robust this year with China buying large quantises of high­heat variety of chilli. Though Chinese harvest has been good, its production of chilli of high heat variety is insufficient to meet the demand, exporters said. “The only problem exporters face now is the delay in refund of IGST paid,“ said Shailesh Menon, director of exporting firm Jabs International.