Lesser arrival of chilli at the physical market is helping it stay firm even as exports decline, traders said. Exports are quiet with China selling at lower prices compared to India. The domestic market has been moving up in the last few days with several market intelligence agencies asking farmers to hold stocks and sell at a later period.
Econometric analysis of 18 years monthly data on modal prices of Guntur Market by the Agricultural market intelligence centre (AMIC) of Acharya NG Ranga Agricultural University (ANGRAU) says that the prices would range from R10,000-10,500 per quintal during May and June 2011. ?Farmers are advised to store and sell red chillis in later part of May and June 2011.The cost of storage in cold storage is R0.40 per kg per month,? P Raghu Ram, principal investigator of ANGRAU said.?Chilli exports have crossed 2 lakh tonne in the last fiscal and the prospects for look good, as the crops in China a major chilli producer is not that good,? he said. He added that prices are expected to surge with carryover stocks being low. Spot prices at the Guntur market as on Wednesday stood at R88.28 per kg.
Anand James of Geojit Comtrade feels that the market is volatile and may stay positive in the short-term. ?Production is lower due to unseasonal rains. Quality of the chilli coming to the market is also on the lower side,? he said. He belives that the weak currency would help in exports. According to Geojit Comtrade reports, production in 2010-11 is estimated around one million tonne which is 16% lesser than last year?s production.
Nalini Rao, research analyst at Angel Commodities feels that the market may be remain flat for some days and then move in for a correction. ?The market will remain closed for some days in Guntur. The production is lower and some stocks were destroyed by fire recently,? she said. ?But export prospects don?t look good as China is offering chilli at a discount,? she added.
Chilli production averages around 13.5 lakh tonne annually and Andhra Pradesh accounts for over 7.5 lakh tones, says the reports by ANGRAU. India is the leading producer of chilli contributing close to 43 per cent of the world production followed by China (8.6 per cent), and Peru (5.6 per cent).Guntur in Andhra Pradesh is the largest chilli trading market in the world .