MUMBAI: Red chilli prices rose sharply in the spot and futures markets on March 15, 2007 with exporters stocking up to fill a gap created by crop failure in China, traders and exporters said.
India and China are the largest exporters of the commodity in the world with 25% and 24% share of total global exports, respectively.
“Prices are fluctuating with the buying trend from chilli exporters. Now they are buying and prices are going up,” said Alepata Srinivas Rao, a Guntur-based trader.
Guntur, in Andhra Pradesh, is the biggest chilli market in Asia and sees a daily arrival of 60,000 bags of 40kg each.
India, the biggest producer and consumer of chillies, had an average annual production of 1.2 mt during 2001-05, of which 10% is exported, according to the Spices Board of India.
This month, the price of LCA 334, the most traded variety, rose by Rs472 to Rs4,504 per 100kg in the Guntur spot market.
At 11:45am, the March chillies contract on the National Commodity and Derivatives Exchange was up Rs17 to Rs4,666 per 100kg. The March contract rose by Rs528 this month. In the same period, the April contract was up Rs337 to Rs4,448 per 100kg.
India expects to harvest a bumper crop this year which was 20% higher than the usual output, however, no official data was available.
“Shortfall in China has been keeping the price steady. It has minimized the effect of a bumper crop,” Rao said.
“Indian chillies are still favoured for quality reasons, due to its high pungency. The arrivals are good, and this year India can increase its global market share,” said Saravanan Lokasundaram of Greencrop Merchandise, a Chennai-based exporter.
Sri Lanka, Indonesia, Mexico and Malaysia are now importing Indian chillies, he added.
In 10 months from April 2006 to January 2007, India exported 98,000 tonnes of red chillies worth Rs513 crore as against 94,715 tonnes exported in the same period last year.
Though cultivated in the country througout the year, the main harvesting season starts from February and lasts till April. Andhra Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Orissa, West Bengal, Rajasthan and Tamil Nadu are the major chilli producing states.