Low stocks at storage facilities set to increase demand for red chillies

With lower stocks of red chillies at cold storage facilities, the crop is set to be in good demand for the harvest in the current season. The prices of new arrivals would also be maintained at higher levels due to the current lower stocks, a study by the Tamil Nadu Agricultural University (TNAU) said.

The study was conducted for a paper submitted on price behaviour of red chillies in the domestic market by the domestic and market intelligence cell (DMIC) attached to the TNAU. The study pointed to the low stocks currently being maintained by traders in their cold storage facilities. Hence, the DMIC has advised the farmers to take up sowing of red chillies during the October-November period in a bid to get around Rs 47-50 per kg during the harvest season of January-May 2009.

While providing a positive forecast, the DMIC has also revealed the risks involved. N Raveendran, professor and project coordinator, DMIC, said that the price of red chillies might come down to around Rs 40 per kg if a bumper crop (more than 12-lakh tonne) was harvested in the current season which depended on the northeast monsoon commencing as per schedule.

He said that a proper onset and distribution of rainfall during Northeast monsoon played a major role in the cultivation of red chillies. In such cases, he said that the farmer could take advantage of the price hike during the off-season by stocking red chillies in bulk quantities. Generally, the arrival of red chilli starts with the first crop from Madhya Pradesh in mid-October followed by Karnataka (Byadgi chillies) in November, Maharashtra in December, with the crop from Andhra Pradesh and Tamil Nadu coming in January. While red chillies arrive in the market till the middle of May, peak arrivals are reported during the March-April period.

During the 2007-08 season, farmers cultivated red chillies over around 7.2 lakh hectare, up from 7 lakh hectare covered a year ago. Rising export demand coupled with higher price realisation in the domestic market has motivated farmers to bring more area under chilli.