Andhra chilli acreage may rise 40% in 2006

Higher price realisations have prompted Andhra Pradesh chilli farmers to increase acreage for production, said industry officials.

Area under chilli cultivation in the country's largest chilli producing state is seen up 35-40 per cent in 2006 from a year ago.

"This year, the farmers got good price for their produce. This has prompted them to increase the acreage for chilli," said Kilari Rossiah, president, Guntur Chilli Merchant's Association1.

Chilli prices have been skyrocketing since September 2005 owing to low produce and good export enquiries from Bangladesh and Sri Lanka.

On an average, in 2005-06 (August-May) chilli prices in Andhra Pradesh have risen to Rs 5,000 per 100 kg.

"Even after the state government's repeated advice to farmers to cut the chilli area, they still seem to grow more of it," Rossiah said.

In 2004, there was a bumper chilli crop, which led to huge financial loss to the farmers.

Traders in Guntur, the chilli hub of the country, said sowing of the spice was a very expensive affair as the cost of raw materials and other inputs were very high.

On an average, a farmer needs to spend around Rs 40,000 per acre.

The Andhra Pradesh government had hence intervened and asked farmers to switch to other cash crops""cotton, castor seeds, among others.

However, good price realisations have diverted farmers' attention back to chillies, they said.

"Based on the survey conducted by the traders, there will definitely be a 25 per cent jump in the area. However, anything more than that would depend on the arrival of the monsoon," Rossiah said.

After Indian Meteorological Department's reports that rains have lashed the Telengana region Of Andhra Pradesh, scientists have recommended farmers to begin sowing.

"During July, we get more rains than any other month. Even if there is a dry spell in Guntur region for a week or so, it will not affect the chilli crop in Andhra Pradesh. This is definitely the best time for sowing chillies," said H P Das, director, Agricultural Meteorology Division of India Meteorological Department.

Traders said farmers could increase the sowing if they were blessed with more-than-normal rains.

"If rains help the farmers we could see a 40 per cent increase in acreage, compared with the estimated 25 per cent," Rossiah said.

Last year, around 30,000-40,000 hectare of land was bought under cultivation and the total production was 4-4.5 million bags (1 bag=40-45 kilogram), traders said.

This year, around 50,000 hectare is likely to be brought under cultivation, they said.

However, the expected higher production of chillies might not dent the prices as analysts feel that in the long-term prices could surge backed by good export demand.

"There are certain quality issues of Chinese crop, which will attract buyers to India," said Vinayak N V, analyst, Karvy Commtrade.

China is India's key competitor and the crop from China arrives by November.