Chilli futures to stay steady

Chilli futures on the National Commodity and Derivatives Exchange are likely to remain steady with a negative bias because of rising arrivals on the back of higher output of around 13 million tonnes, analysts and traders said on Wednesday.

Chilli spot prices are likely to be slightly down from the current level of Rs 33-38 a kg, they said.

Spot market is likely to show a slightly weak trend as new crop arrivals are expected to rise significantly at Guntur, said Harish Gallipelli, head of research at Karvy Comtrade.

Currently, Guntur market is witnessing arrival of 20,000 bags (1 bag=40-45 kg) each of new and old crop. "However, downside in prices is limited as there is good demand that will support prices at lower level," said Vinaykanth, proprietor of Vinay Spices, Guntur.

Demand for chilli in Indore market also remains steady, with weekly arrivals of around 100,000 bags being bought completely by traders from Bihar, Gujarat, Rajasthan, and Uttar Pradesh, said Vinod Jain, a local trader.

Indore spot chilli prices are at Rs 33-35 a kg for the best variety, Jain said.

Futures are likely to fall more than spot as output is likely to rise to around 13 million tonnes in the current year, compared with 11.5 million tonnes a year ago, Gallipelli said.