Red chilli prices fell due to weak demand and strong supply

31-Jan-2025 12:12 PM

The drop in red chilli prices, due to weak demand and strong supply, is creating a tough situation for producers, especially in major producing states like Telangana.

The 35% price drop from Rs 19,000 per quintal in January 2024 to Rs 12,000-13,000 in January 2025 has raised concerns among farmers who were hoping for better returns from their crops.

The weakening of demand, particularly from large importing countries like China, Bangladesh, and Malaysia, combined with the increase in supply from both new and stored goods, has led to this price downturn.

Though red chilli exports did improve slightly in volume (up by 27,000 tonnes from last year), the export revenue declined by 15%, reflecting the lower prices being offered.

This situation is putting pressure on producers who had stored their stock in cold storage, hoping for a price rebound, but now face the reality of having to sell at much lower prices.

The producers in Telangana are urging the government to step in with a support price of Rs 20,000 per quintal to ease their financial burden.

The hope is that a government purchase at that price might help stabilize the situation, but with global demand remaining soft and prices still lower than last year’s highs, it’s unclear how quickly the market will recover. How do you think the government could help address this challenge ?