Weekly Review-Red Chilli
18-Jan-2025 08:18 PM
Fall in Red Chilli Prices: No Chance of Rise
Weekly Review: Red Chilli Market
Fall in Red Chilli Prices: No Immediate Rise Expected
New Delhi:
The prices of red chillies have been falling recently. Although this season's production is expected to be weaker due to reduced sowing at major production centers, the high stock of red chillies from last year’s record production has kept the prices low. iGrain India, in its previous report, had predicted that the price of Teja red chillies in the Guntur market would drop to Rs 150-155 per kg, from the Rs 162-165 range. It is now forecasted that prices may decline further by Rs 8-10 per kg in the coming days.
The arrival of new stock has begun in Khammam and Warangal, while Guntur continues to receive 35-40 thousand bags daily. In Guntur, the stock of red chillies is reportedly 28-30 lakh bags, a significant increase compared to the 14-15 lakh bags last year. Similarly, the stock in Warangal and Khammam is up to 15-16 lakh bags, as opposed to 7-8 lakh bags last year. Markets in Karnataka are also reported to have larger stocks than in 2024.
Production Outlook:
Despite weaker sowing in Telangana and Andhra Pradesh, which will result in lower production, the harvest in Andhra Pradesh is expected to be around 1.5 crore bags, down from 2 crore bags last year. Telangana's production is expected to be around 55-60 lakh bags, compared to 75-80 lakh bags in 2024.
Market Prices:
Currently, the price of new Teja in Guntur is Rs 150-152 per kg. Prices are expected to stabilize until the end of January when demand for Ramzan begins to affect the market. Once the dry red chillies start arriving, in early February, prices are expected to rise. However, once the Ramzan demand subsides, a price decrease is anticipated, with the price of Teja in Guntur potentially falling to Rs 140-145. Prices in Warangal are reported at Rs 145-148, and in Khammam, they stand at Rs 154-155 per kg.
Export Trends:
Record production last year led to lower prices, which, in turn, spurred exports of red chillies. From April to October 2024, India exported 330,512 tonnes of red chillies, generating Rs 5,397.72 crore in revenue. This was an increase from 304,080 tonnes in the same period the previous year, although the income from these exports fell due to lower prices. The total export of red chillies for 2023-24 is expected to reach a record 649,815 tonnes.
In summary, while red chilli prices are currently low, driven by high stock levels and reduced demand, production shortfalls may cause gradual price increases in the coming months. Export figures show strong demand despite lower revenues.