New crop to take sting off
chillies, prices may slip now
11
January 2021
Makar
Sankranti, which marks the end of winter season and beginning of a new harvest
season, usually brings cheer to farmers. This is especially so as the
inauspicious Hindu period of Kharmas comes to an end in mid-January.
However,
chilli growers could feel the heat rising with the arrival of new crop picking
up and putting pressure on prices in the physical markets.
The
New Crop Arrivals Have Started Andhra Pradesh, Telangana, Karnataka And Madhya
Pradesh, And Are Likely To Peak Over The coming Weeks
"Arrivals
of the new crop are expected to gradually pick up pace after Makar Sankranti as
the season will enter its peak harvest starting mid-January," said Satish
Degala, a trader in Guntur.
The
new crop has already started coming into the key wholesale markets of Andhra
Pradesh, Telangana, Karnataka and Madhya Pradesh and the arrivals are likely to
peak over the coming weeks.
Apart
from supply pressure of the new crop, ample carry forward stocks due to low
consumption and expectations of a bigger crop in the current season are also
seen pushing prices down in the near future, market experts said.
India's
chilli production in the current season 2020-21 (Jul-Jun) is seen at 1.7 mln
tn, 10-15% higher than the previous year, according to trade estimates.
Andhra
Pradesh is the top chilli producer, accounting for around 45% of the country's
crop, followed by Telangana, Karnataka, Madhya Pradesh and Maharashtra. And the
carry forward stocks of Andhra Pradesh and Telangana combined are projected at
120,000-140,000 tn, according to trade estimates. There are hardly any stocks
left in Madhya Pradesh.
In
Guntur, Asia's largest chilli market, teja variety is currently being sold at
14,000-15,500 rupees per 100 kg, and the LCA-334 variety is being traded at
11,500-12,500 rupees. Prices of teja variety are likely to decline to
10,000-12,000 rupees after mid-January, and LCA 334 may fall to 8,000-9,000
rupees levels.
Demand
for the new crop is currently subdued due to high moisture content, and traders
are waiting for Makar Sankranti after which quality of arrivals is expected to
improve.
Currently,
daily new crop arrivals are in the range of 15,000-20,000 bags (1 bag = 40 kg),
and are expected to rise to 30,000-40,000 bags after Makar Sankranti, which is
on Thursday. Arrivals are expected to rise further to 90,000-100,000 bags in
February.
In
Madhya Pradesh, another key producing state, prices of export quality chilli
are expected to decline to 11,500-12,000 rupees per 100 kg, from 14,500 rupees
currently.
"I
don't see any upside for chilli this year as consumption has taken a hit
because of the pandemic," said Naval Khaitan, a prominent trader and
exporter from Mumbai.
Khaitan
said key export destinations like Sri Lanka, Bangladesh, China and Indonesia
are buying cautiously as the shipments are getting stuck because of the
COVID-19 restrictions.
On
the domestic front too, demand from restaurants for red chilli powder is weak
as people are still reluctant to eat outside.
However,
market participants said that weather could play an important role. Any adverse
change in the coming months could act in favour of chilli prices.
"The
recent rains in Andhra Pradesh's Kurnool district are likely to delay arrivals
of premium quality spice by 10-15 days," said Jugraj Bhandari, president
of The Chillies Export Merchants' Association.
Source:
https://www.cogencis.com/newssection/c