Andhra chilli procurement may be 25% short of target

The state's chilli procurement in 2005 is seen at 7,000-7,500 tonne, only one-fourth of the targeted quantity, A Venkateshwarlu, general manager-procurement and marketing at the Andhra Pradesh Markfed said. The procurement is likely to continue till Saturday, beyond the earlier deadline of May 31.

"This is not an extension of the deadline. We would continue buying chilli only from those farmers who list themselves with us (the Andhra Markfed) by June 1," Venkateshwarlu said.

Till last Saturday (May 28), the state had procured 6,000 tonne of chilli from farmers in Guntur, Warangal and Khammam.

"Till June 4, the agency is expected to procure around 200-300 tonne of chilli daily," Venkateshwarlu said.

This would mean the agency would buy only around 7,000-7,500 tonne of chilli till June 4, which is one-fourth of the targeted 30,000 tonne.

The procurement will be much below target because the state markfed has maintained stringent quality standards and the crop brought in by farmers has not been up to the mark, he said.

"Although some state collectors have made representations to the Andhra Pradesh government to extend the chilli-buying deadline, no such announcement has come till now," Venkateshwarlu said.

The Andhra Pradesh Co-operative State Marketing Federation plans to sell this procured chilli in both the domestic and overseas markets.

"However, we will wait for chilli prices to pick up and would sell this chilli only after two months because during that time the demand is expected to come from cold storage stockists," Venkateshwarlu said.

Currently, spot price of chilli in Guntur is at Rs 1,500-1,760 per 100 kilogram. However, July and August futures prices are already trading at a premium of Rs 600-700 per 100 kg, Venkateshwarlu added.

Last year, the agency had procured 30,000 tonne of chilli at Rs 2,700 per 100 kg.

It has raised its estimate of chilli production in the state for 2005-06 to 600,000 tonne from 538,000 tonne last year.

Last year, Andhra Pradesh produced 600,000 tonne of chilli, over 50 per cent of the country's output of 11.8 million tonne.