The prices of Grade A quality chilli in Asia’s biggest chilli market at Byadgi has hit an all time high, thanks to a sharp decline in the inflow of chillis into the market due to the untimely rains and pest attacks.
Byadgi in Haveri district is famous for the Kaddi and Dabbi varieties of chillies which are in great demand as oleoresin oil is extracted from the chilli and exported. While the Kaddi variety is gnarled thin and long with not many seeds, Dabbi is small and plump with more seeds. The pulp is used by the lipstick industry.
The trade which began a month ago has not picked up as not many farmers are bringing their produce to the market. The market received 1,400 tonnes this year compared to 2,500 tonnes last year, 75,000 tonnes in 2006-2007 and 65,000 tonnes in 2007-2008.
The traders expect this year’s inflow to reach a maximum of 4,000 tonnes. Cashing in on the situation, the farmers are selling the produce at Rs 14,000-15,000 per quintal. The Grade A chilli is being sold at Rs 15,000-20,000 which is Rs 5,000 more than the price last year. The buyers expect the prices to fall as they are awaiting the arrival of chilli from Bellary and Hoovinahadagali to enter the market.
Earlier Byadgi Chilli was grown mainly for the purpose of using it in food items as a spicy ingredient but recently, it has also been grown for the extraction of oleoresin, a red oil from the pods. Oleoresin is used in the preparation of nail polish and lipsticks. The extraction of oleoresin has also led to the creation of cold storage units in Byadgi since the chilli pods have to be maintained at a low temperature of 4 to 6 degree Celsius in order to maintain the colour and purity. Storing in cold storage units also increases the amount of oleoresin extracted from chilli by about 30-40%. About 50 litres of oleoresin can be extracted from about 1 tonne of Byadgi chillies.
Companies have been set up in and around Byadgi that are involved in the extraction of oleoresin. This oleoresin is then sent to Kerala where it is further refined before being exported to countries like USA, Japan and those in Europe.
Byadgi chillies are primarily sold at the Byadgi chilli market; annual sales are about Rs 300 crores ($75 million). This market attracts traders from all over Karnataka and from neighbouring Andhra Pradesh because of favourable conditions for business like fair price, immediate payment and accurate measurement of the chillis.