Chilli prices may spurt on crop damage

A drop in chilli production due to heavy rains could push up chilli prices to record levels after May, a recent study by the agricultural market intelligence centre (AMIC) of Acharya NG Ranga Agricultural University (ANGRAU), showed.

?This year?s continuous rainfall in the first week of December have resulted in damage to the chilli crop because of which production would be lower by almost 30%,? P Raghu Ram, principal investigator of AMIC told FE.

ANGRAU had reported in August that the area under chilli would come down in the current crop season due to better returns from turmeric and cotton. According to ANGRAU estimates the area under chilli in Guntur would be down by 20%. Raghu Ram said that availability of good quality chilli would be definitely on the lower side in the current season.

Cyclonic rains in December had inundated the chilli producing areas in coastal Andhra Pradesh and destroyed the crop, he said.

The quality of crop coming to the market is also low, he added. Chilli harvest has just begun in Guntur from where most of the crop comes. Harvesting in other states like Madhya Pradesh and Karnataka are almost in their final stages.

?It is understood from trade circles that production would be down in China, Pakistan, Burma and Bangladesh due to floods,? Raghu Ram said.

Trade analysts are also speaking of good exports in the current financial year from traditional buyers like Malaysia and Bangladesh.

According to a Spices Board estimates during April to November period, India’s chilli exports increased by 26% in volume and 22% in value as compared with the same period of last financial year.

Consumption of chilli has increased substantially with branded powder sales growing at a compound annual growth rate (CAGR) of 11% while the spices mix category growing at a CAGR of 7%, according to the spices board report.

?Current prices of Teja varieties are hovering around Rs 6,500 to Rs 7,500 per quintal. Prices may come down by Rs 1,000 per quintal from February 2011 as arrivals starts coming in big volumes,? Raghu Ram said.