Chilli acreage is likely to drop down by 50% in the coming crop season with the market in a bearish mode due to a supply glut. Market prices of chilli are well below the production cost and the farmers are in distress. India is the world leader in chilli production, followed by China and Pakistan. Chilli farmers in India are facing a crisis with the prices sliding by 50-60% due to a production glut. Increase in sown area and better yield have resulted in a bumper crop which could be higher by 40-50% from the last year. Farmers are rushing to store the new stock in cold storage to avoid selling at the depressed prices. “Farmers are in distress with the average price of chilli being `35-40 per kg against `80-90 for the lowest quality. For good quality chilli, the average price last year ranged between `120-130 per kg, prompting many farmers to go in for higher acreage. The production cost of chilli per kg would come to `80. Many are likely to switch to the safer cotton crop in the next season,” trader Peraiah Ravipati from Bellary told FE.
The Andhra Pradesh government has announced a financial support of `1,500 for every quintal over and above the price the farmer gets, but it has been capped at 20 quintals per farmer.