Chilli prices up on export demand, weak arrivals

Arrival patterns will decide the chilli price trends this week. Arrival, so far, this season has not been in full force, and supply to the market has not been uniform, market sources said

The spot prices, which were ruling in the range of Rs 3,000 and Rs 3,800 a quintal, have shot up to Rs 4,000-4,800 a quintal on the back of good export demand. However, the last couple of days have seen the market moving steadily with prices ranging between Rs 3,800 and Rs 4,500.

According to commodity analysts, the rising export demand and weak arrivals may see further rise. However, traders said in case of improved arrival pattern, chilli prices may fall by around Rs 200 a quintal within a week.

On Monday, arrival in Guntur market was 80,000 bags (each of 40 kg) against the normal arrival of 1 lakh bags a day. Last week saw the arrival in the range of 30,000 to 50,000 bags a day, whereas it should have been between 50,000 bags to 100,000 bags a day.

China (one of the leading chilli exporters), Bangladesh, Malaysia and Singapore are currently the hot export markets. China reported failure of chilli crop and has turned into a net importer.

"On an average, 50-60 per cent of the total arrival is being picked up by the exporters," said Ashok Dattani, a chilli trader. The country is expecting a total of 2.3 crore bags of chilli this season against last year's 1.35 crore bags.

Meanwhile, on the National Commodity and Derivatives Exchange (NCDEX), the near month contract of chilli closed at Rs 4,699 a quintal against last week's close of Rs 4,518 a quintal, up 4 per cent, amidst reports of import duty cuts by Sri Lanka. The move may strengthen the export demand from India.