Chilli is no more a hot commodity following the arrival of rains and lack of demand during the monsoon season and the trend is expected to continue for another five months.
With the sowing season nearing, prices may not see any major surge for another few months. The chilli Futures market is already showing signs of weakening.
According to traders, the Guntur market reopened on Thursday but saw palpable activities only on Monday. The market witnessed an overall arrival of around 60,000-65,000 bags (40 kg each) against 30,000-35,000 bags in the first two days after the market reopened.
However, on Monday only 35-40 per cent of the arrival was sold. Of this, around 40,000 bags were produced by the farmers and the rest came from cold storages. Around 8 lakh bags are still held by farmers, which is not of good quality.
Farmers fetched Rs 2,500-3,300 a quintal on Monday and that from cold storage (of better quality) were sold out in the range of Rs 4,000-4,500 a quintal.
Traders said there is no demand from the export markets (Bangladesh, Sri Lanka). Local demand is equally poor and chances of any uptrend in the overall market are unlikely.
Stocks of chilli in the cold storages are around 80 lakh bags. Of this, Guntur alone accounts for over 50 lakh bags.
June and July are very sluggish months in terms of demand for chilli and so is the effect on the rates. Unless some demand comes from export markets, rise in rates are unlikely.
Meanwhile, reports said sowing has begun in some parts of Karnataka. Market observers said as rains start, sowing will quickly follow in other states also. Farmers in Madhya Pradesh had better prices last time as the products came earlier. It is expected that this time, acreage of chilli may increase from the state.
