Chilli spot seen steady amid weak demand

Chilli spot prices at Guntur in Andhra Pradesh are likely to be steady in the Rs 39-Rs 45 per 1 kg band in the week ahead, traders and analysts said.

Prices are seen supported by strong demand for good quality chilli, while ample stocks in Guntur warehouses could cap prices, they said.

On the National Commodity and Derivatives Exchange, all chilli futures are expected to be firm as traders expect good festive demand because of Durga Puja and end of Ramzaan around October contract expiry to lead to a rise in domestic and export demand, analysts said.

There is good demand for high quality stocks and traders are not ready to sell premium stocks for lower rates, said Mungilal Mundra, a Guntur-based trader.

Stocks in Guntur warehouses are at high levels of around 3 million bags.

"However, at the moment, overall demand, both domestic and export, are likely to be weak and are likely to pick up only ahead of Durga Puja and Ramzaan next month," said Naresh Sharma, proprietor of Guntur-based Mirnal Exports.

Indore spot chilli prices and demand for cold storage stocks have fallen drastically as traders expect fresh arrivals to start trickling into the market after two weeks, said Kishore Rathod, a local trader.

Indore spot prices are flat at Rs 44-Rs 47 per 1 kg as there are no takers for old stocks and trading is largely muted, traders said.

On NCDEX, front-month October contract is likely to remain firm over the next week on expected rise in domestic demand for festive purposes ahead of Durga Puja and higher exports to Bangladesh following the end of Ramzaan period, analysts said.

October contract prices is likely to witness resistance at Rs 4,900 per 100 kg while support is seen at Rs 4,550, said Nalini Rao, research analyst, Angel Commodities.

Weak chilli stocks in NCDEX warehouses are also likely to spur some technical buying in the October contract, analysts said.