Chilli spot prices steady, futures move in range

Chilli spot prices in the key market of Guntur, Andhra Pradesh, are seen steady as demand for superior quality stocks continues to be strong, traders and analysts said today.

On the National Commodity and Derivatives Exchange, prices are likely to remain mostly rangebound. However, there may be bouts of profit-booking due to a lack of clear positive factors, analysts said.

Spot chilli has been largely rangebound as the rise in prices was capped by very high stocks in the Guntur market, which are currently around 3.8 million bags (1 bag=45-50 kg), Faiyaz Hudani, research analyst, Kotak Commodities, said.

Traders have also stopped reacting to conflicting reports on crop prospects from China, as some estimates indicate that crop may be damaged by 25 per cent, while others estimate a 30 per cent rise in crop.

"China being a mostly closed economy, it is very difficult to get clear data on what the real crop scenario is and so traders are now waiting for actual orders instead of tracking reports," a Guntur-based trader said. In Guntur, spot prices were at Rs 4,200-4,500 per 100 kg, unchanged from Monday's close and are likely to remain in this range this week, traders said.

Prices are being supported by good demand for superior quality stocks from West Bengal and the rest of the eastern region. However, paucity of trucks heading towards the eastern region continues to limit rise in offtake from the market, traders said.

Arrivals in Guntur, the main trading centre, were around 40,000 bags (1 bag=45-50 kg) today, up from 25,000 bags on Monday, Vinaykanth, proprietor of Guntur-based Vinay Spices, said.

Indore chilli market is closed today on account of Rakshabandhan. Indore spot prices are expected to remain steady at Rs 4,500-5,000 per 100 kg due to good demand from Uttar Pradesh, Vinod Jain, a local trader said. Weekly average arrivals in Indore market are expected to be around 5,000-7,000 bags.

On NCDEX, September contract prices are likely to move in the range of Rs 4,400-4,700 per 100 kg during the week, Safdar Golwala, research analyst, Emkay Commotrade, said.

The contract is likely to witness profit booking every time prices rise above Rs 4,600 per 100 kg, Hudani said.

September contract is likely to receive strong support from low stock in exchange warehouses, at 1,011 tonnes as of Saturday, unchanged from Thursday.

However, high stock in Guntur and expected arrivals from Maharashtra and Madhya Pradesh in small batches are likely to keep prices in the range of Rs 3,800-4,800 till its expiry, analysts said.

At 1:35PM, September contract was at Rs 4,599 per 100 kg, down Rs 43, or 0.93 per cent from Monday.