Chilli surge temporary

Though the chilli market has seen a slight surge in the spot as well as the futures market, marketmen said it was a short-term phenomenon and won't last long. The surge had followed fresh demand from Bangladesh.

On Tuesday, rates quoted in Guntur were between Rs 3,500 and Rs 4,150 a quintal. This is around Rs 1-1.5 a kg more.

However, the off take to Bangladesh is just around 1,500-2,000 bags (each of 35 kg) per day. The arrival rate in the Guntur mandi is reported to be around 35,000 bags. The total off take including domestic demand is 10,000-12,000 bags.

"The present trading is very minuscule in the huge chilli market. Buyers from Bangladesh normally opt for the best quality chillies. The surge in demand could be one of the reasons why the prices went up," said a market source.

Traders opined that Rs 3,500 a quintal mark was on cards this season and that the recent fluctuation would not impact the chilli market which was bound to become bearish further.

The chilli stock in the Guntur market is 70 lakh bags and the new crop is expected as early as October, especially from Madhya Pradesh and in December from Andhra Pradesh and Karnataka. It is estimated that the acreage under chilli would rise by 25-30 per cent this year.

On the National Commodity and Derivatives Exchange (NCDEX), the near month contract over the last one week saw a decline from Rs 4,001 a quintal to Rs 3,830 a quintal, down 4.3 per cent. On Tuesday, the market was a bit strong as futures hovered slightly above the Rs 3,900 levels.