The sowing area for red chilli has seen a significant decline this year, primarily due to high stock levels from previous harvests and weak market prices.

This has led many farmers to reduce the area dedicated to red chilli cultivation, opting instead to grow more attractive crops such as maize and moong. This trend is particularly noticeable in major producing states like Andhra Pradesh, Telangana, and Karnataka.

Experts predict a sharp reduction of around 25-30% in the sowing area for red chilli in comparison to last year. The high stock levels in cold storage are a key factor behind this shift, with traders reporting unusually large quantities of red chilli still in storage.

For instance, the stock in Guntur, a major hub, has surged to 42 lakh bags (each weighing 40 kg), up from 27 lakh bags last year. This surplus has contributed to lower market prices, further disincentivizing farmers from planting red chilli.

The third advance estimate from the Union Agriculture Ministry shows an increase in the national red chilli production area, from 8.52 lakh hectares in 2022-23 to 9.90 lakh hectares in 2023-24, with total production also rising from 27.82 lakh tonnes to 32.08 lakh tonnes.

However, this increased production is overshadowed by the high levels of outstanding stock, which are weighing down market prices.

In addition, the conditions of the red chilli crops in states like Madhya Pradesh, Gujarat, and Maharashtra have been affected by heavy rains and floods, further complicating the outlook for the crop.

In contrast, states like Karnataka still have substantial stock, ensuring that despite a fall in new production, supply will remain relatively stable.

As a result, the price of the Byadgi variety in Karnataka has dropped to around Rs 22,000 per quintal, reflecting the oversupply in the market.