The Hindu Business Line : Export demand may keep chilli prices hot

CHILLI prices are expected to remain firm in the short run on good export demand coupled with limited stocks, despite reports of good crop for the next season.

"Prices are almost steady in last few days on limited local buying interest amid scattered inflows from major terminal market such as Guntur. Daily inflows at the Guntur market are around 25,000-30,000 bags (each of 35 kg). Domestic demand is limited," a local dealer said.

Current spot prices at the Vashi wholesale market are around Rs 2,500-3,000 per quintal depending on the quality.

"Export demand from major importing countries such as China, Pakistan and Sri Lanka is good and it is expected to remain good till end of the current year. The country has surpassed an export target of 70,000 tonnes for year 2004 set by the Spices Board in the first six months of 2004. Exports during the six months have reached 70,000 tonnes as against 55,000 tonnes the whole of last fiscal," Mr Ashok Dattani, a leading chilli trader and President of the Bombay Kirana Merchants' Association said.

Red chilli crop for the next season is expected to increase to 2.10 crore bags (each of 35 kg) as against current year's estimate of 1.65-1.70 crore bags. In Andhra Pradesh, crop is expected to increase to 1.50 crore bags from last year's 1.10 crore bags. Crop in Karnataka is expected to be around 24 lakh bags.

"New crop is expected to be bumper one. In Karnataka, still one round of rain is required in the next few days," he said.

Carryover stocks at the end of the current year are expected to be around 8 lakh -10 lakh bags as against earlier trade estimate of 25 lakh bags.

India is the largest producer and exporter of chillies in the world. The important chilli growing states of are Andhra Pradesh, Karnataka, Maharashtra and Madhya Pradesh.

"New arrivals at the major terminal markets of Karnataka, Madhya Pradesh and Maharashtra are expected to start in the next 15 days. However, fresh inflows in Andhra Pradesh (largest producer of red chilli) mandis would commence in the month of January 2005," Mr Dattani said.

"Spot prices are expected to remain steady till end of the current year," he said.

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