Red chilli prices are expected to marginally decline in the coming months on the back of new arrivals, a report by the Domestic and Export Market Intelligence Cell (DMIC) attached to Tamil Nadu Agricultural University (TNAU), said .
However, there will not be much change in prices as crop output is expected to decline this year because of low acreage in Andhra Pradesh, a top chilli-producing state in the country, amid rising export demand.
The report said that with the onset of North East monsoon, farmers are preparing to take up chill cultivation in a big way in other southern states of Tamil Nadu and Karnataka, along side those in Andhra Pradesh. The price of red chill is expected to be in the range of Rs 3,500-3,700 per quintal when the commodity hits the market in February-March 2011, the report said.
Currently, chilli prices in Virudhunagar spot market of Tamil Nadu are in the range of Rs 3,000-3,500 per quintal for the commodity not stocked in cold storage and Rs 4,000-4,500 per quintal for chilli available in cold storage.
Generally chill arrivals across India starts from mid October and runs through May with first crop hitting the market from Madhya Pradesh followed by Karnataka, Maharashtra, Andhra Pradesh and Tamil Nadu. Andhra Pradesh accounts for around 60% of the total chill production in India, which is largest producer, consumer and exporter of the commodity in the world.
This year crop output in Andhra Pradesh and Karnataka (second largest chill producing state contributing 11% in the total production) is expected to decline.
According to the Andhra Pradesh ministry of agriculture, chilli is being grown covering an area of 1.10 lakh hectare in 2010-11 in the state. This is 29% lower than the previous year. The decrease in area coverage was due to increased cold storage capacity in Andhra Pradesh that led to higher carry over stock, the DMIC report said. Current year carryover stock stood at 5.5 lakh tonnes compared to 0.8 lakh tonne last year.
In Karnataka, production is expected to fall as many farmers here are likely to shift from Chilli to maize and cotton as these crops have been fetching higher prices in recent times.
However, market sources said the higher demand from overseas market will support chilli prices in the local market. According to data available with Spices Board, India’s chilli exports increased by 35% year-on-year to 1.02 lakh tonne in April-August 2010.