Red chilli LCA-3 August 2007 futures prices on the NCDEX platform have weakened by 15.5% during the current month mainly on sluggish domestic as well as overseas demand amid higher stocks, despite reports of fall in daily arrivals.
Red chilli August 2007 contracts were down nearly Rs 700 a quintal to Rs 3,830 a quintal over Rs 4,533 per quintal Ex-Guntur in the beginning of the current month on continued selling, traders said.
Spot prices of red chilli at Guntur mandi also fell by nearly Rs 500 to trade around Rs 4,000 per quintal on good supply in the physical market as stockists turned sellers. Physical stock in the cold storages was expected to be around 45-50 lakh bags. However, traders say daily market inflows were down to 30,000 bags. Demat stock in the NCDEX warehouse was 2,533 tonne and open interest was around 9,705 tonne on Saturday.
?Spot and futures prices fell sharply recently because of sluggish domestic demand and higher physcial stock at the Guntur mandi,? a market analyst said.
Overseas demand usually starts in the month of August and September and domestic demand also picks up in the same period as the festival season starts in the country.
Chinese chilli crop is expected to be good for the year 2006-07. As a result, exports to China would be discouraged, sources said. October shipments to China are being quoted at around $800 C&F basis a tonne against Indian prices of around $1,100 C&F.
?Chilli prices may witness bearish trend in the coming weeks,? a trader said.