Chilli Market Price Update: These Factors Are Impacting Current Chilli Market Scenario In India

Chillies are an integral part of Indian cuisine and a crucial ingredient for various food items. India is the world’s largest producer, consumer, and exporter of chillies. In India, the biggest chilli markets are Guntur and Byadigi. However, in the past two weeks, prices of all chilli varieties have been on a stable downtrend, mainly due to a hailstorm the current market situation.

Factors Influencing The Market

• Hailstorm– Post the untimely rain, the chilli rate fell across all major varieties. The prices, which were almost nearing Rs. 300 in major varieties before the hailstorm, have come down to Rs. 230 after the rain. This has affected chilli quality and is not meeting buyers’ requirements (in terms of moisture and good grading), which has further impacted the prices and led to the market collapse.

• Holidays And Fresh Produce Arrival– The financial year end followed by festivals and public holidays lead to market holidays from April beginning. This gives farmers a lot of time for harvesting, grading, drying, and other post-harvesting practices and leads to huge arrivals in all markets. Buyers utilized this situation in their favour to keep the market price in lower trends by observing huge arrivals in all markets. It kept the market at lower prices buyers kept bidding in lower numbers.

• High Temperature– Due to heat waves and higher temperatures, the Byadigi market has announced only one working day a week. And with the same higher temperatures, the Guntur market is facing a lot of labour shortage to work in godowns for loading, unloading, heaping, grading, etc. To work in these higher temperatures, chilli hamalis are demanding higher charges than usual, which leads to a slow work pace in the Guntur market.

Current Bidding Rates

As of now, bidding is going around Rs. 200 for the best quality and Rs. 210 for deluxe quality for all major varieties in Guntur, and bidding is going even less in Byadigi from Rs.185-200. Major varieties like dabbi and KDL in Byadigi have collapsed like anything after reaching Rs. 750/kg for dabbi and Rs. 650/kg for KDL. Now the prices are trading around 550 & 500 for dabbi & KDL varieties deluxe quality.

Teja Price And Market Conditions

Prices are coming down gradually in all varieties except for the teja variety because of lower arrivals and good export demand. When it comes to teja, the prices had come down by only Rs. 20-25, whereas, in other varieties, it has come down to Rs. 60-70/kg.

Market Outlook

Expecting the same 1L+ bags in the coming week continuously from all chilli growing regions, the price has already come down from the peak, and it may lead to another marginal price fall in the coming week as well.

OFB’s Insight

The hailstorm has had a significant impact on the chilli rate in the Guntur and Byadigi markets. The arrival of fresh produce has led to oversupply and lower prices. While the teja variety has not been impacted as much, other varieties have seen a significant decline in prices. With the high temperatures and labour shortage, the situation in the markets remains challenging. However, farmers can hope for some recovery in the coming weeks as the weather stabilizes.

Read more: Why Chilli Prices In India Are On A Roller Coaster Ride?

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