KOCHI: Poor exports and an increased availability from the principal producing region of Andhra Pradesh may again drive down chilli prices in the domestic market.
The prices have recovered to around Rs 60-65 per kg after plunging to Rs 50-55 per kg in the first week of January. Higher production from Madhya Pradesh and a fall in exports have combined to push down the prices to Rs 50 -55 per kg, closer to the cost of production. But the prices have rebounded on improved demand from local traders.
"The crop from Madhya Pradesh, which comes first, is 20% higher this year. Harvesting in Andhra Pradesh has just begun and peak arrivals can be expected towards the middle of February," said APMurugan, director of Paprika Oleos (India), a leading exporting firm. Prices have dropped from Rs 90-100 per kg last year to Rs 60-65 per kg now. According to Murugan, prices have reached the bottom and a further fall could be met with resistance from growers who may refuse to sell.
The cultivable area of chilli has seen a rise of 10-15% in Andhra Pradesh and Karnataka. Many farmers shifted from cotton to the more remunerative chilli this year. As a result, production is expected to swell. Perhaps, a low carryover stock has come as a relief to farmers. The quantity available with cold storages is around 7-8 lakh bags (each bag of 45 kg), which is sufficient for a month's consumption.
Exports have shown a declining trend. "Quantity of exports is down, which could be because of the higher price prevalent last year. It could have led to a buyer resistance," said Philip Kuruvila, managing director of Indian Products. Chilli export in April-November 2011 stood at 1,32,500 tonne valued at Rs 1,266 crore. Quantity fell by 24% while value was up by 20%.
The next three months do not hold high promise because of a debt crisis in Europe. The crop in China, a major producer of the high-colour low-heat variety, is reported to be good. At present, the Chinese price is higher than the Indian prices. But exporters say it could drop to a more competitive level by the end of the month.
Source : economictimes.indiatimes.com