Chilli rebounds on crop concerns, demand from exporters and stockists

Dry red chilli prices have rebounded and firmed up in the recent times on concerns over crop size, demand from exporters and stockists. The trade feels the overall crop size is likely to be lower than the initial expectations, which were fuelled largely by an increase in acreages across all the three key producing States of Andhra Pradesh, Telangana and Karnataka.

“Earlier there was expectation of abundant quantity, but the crop health is not well and the yields may reduce. As people are expecting fall in yields, the prices have started looking up from the past few days and may remain firm for the next few weeks,” said Ravipati Periah of Vijayakrishna Spices in Hyderabad, a large exporter.

The prices of dry chillies, which had come down by around 40 per cent have now rebounded. On an average, prices have moved up by about 20-25 per cent from around ₹150 per kg to around ₹190 across the growing regions for most of the varieties in the past few days, Periah said. However, when compared with last year, the prices this year are lower by around 20 per cent, he said.

Crop size

“Exports are going on well and there is good demand from China for the Teja variety,” said Samabasiva Rao Velagapudi, Chairman of All India Chilli Exporters Association in Guntur. Prices have moved up by ₹20 per kg in the past one month. Also there’s demand from stockists who have started storing the new crop, Velagapudi said, adding that the crop size could be lower than initial expectations. The crop size may see a maximum increase of around 10 per cent, he added.

Teja is the widely exported chilli from India mainly to China, while the spices crop is also shipped to South East Asian countries and Sri Lanka among other countries. India’s chilli shipments touched a record ₹10,444 crore during 2022-23.

Sandeep V, who handles spices business at BigHaat, a digital ecosystem for farm sector which also exports chillies and sources for domestic companies, said the acreages this year were up by around 12 per cent. However, the overall crop could be down by around 5 per cent as the yields were impacted by the impact of Cyclone Miachaung in Andhra and Telangana and due to less rains in Karnataka. Prices have started improving from the past 20 days and now the average prices are around ₹200-220 per kg across markets and people are stocking up, Sandeep said.

In Karnataka, where the Byadgi variety of chilli — known for its high colour content and lower pungency, is largely grown — the arrivals are on the rise. “The market arrivals are on the higher side. The masala companies are cautious and buying on a need basis” said Basavaraj Hampali, a trader in Hubballi. Prices of Byadgi chilli variety are hovering around ₹43,000 per quintal, down from last month’s ₹48,000 levels.

As per the second advance estimates for 2022-23, India’s red chilli crop is seen at over 20.59 lakh tonnes (lt). Andhra tops the production with 7.67 lt, followed by Telangana at 5.06 lt and Madhya Pradesh at 3.22 lt. In Karnataka, the production is estimated at 1.67 lt.