CHILLI - Market Prices Report
May 25, 2017 at 8:08 AM ,
Rainbow Exports
STEADY SENTIMENT FOR CHILLI
Continue steady sentiment witnessed in Red Chilli Warangal and Bedia market on Tuesday, Wednesday and Thursday.
Currently no trading activity reported in Guntur mandi due to summer vacation. Normal export demand reported in the spot market.
However, Exporters and stockists are not buying in bulk due to quality issue. They are expected to become active after the summer holidays in Guntur market as cold storage stocks will start releasing in the market.
As per farmers information, Red Chilli area likely to go down current year kharif season in Andhra Pradesh and other southern states as farmers may shift to other crop like Cotton due to assurance of prices.
Increasing stock position in the domestic market and lower quality supply pressurizes the prices.
Farmers revealed that Chilli area may shift to Cotton crop as Govt. minimum support price currently around US$610 per mt. (medium staple cotton) & US$650 per mt. (long staple cotton) in 2016-17. The Indian govt. is planning to increase cotton MSP (Minimum Support Price) this year US$630 per mt. (medium staple cotton) & US$68 per mt. (long staple cotton) in 2017-18, so there is assurance of getting minimum price.
Currently farmers were waiting for monsoon rainfall, actual data will come after 15th June. If this happens, chilli prices are likely to recover to around US$950 to US$980 per mt. towards the third and fourth quarter of 2017.
Red Chilli supply in Warangal market was reported up by 100000 bags during the week. From last year same period supply up by 78500 bags due to increased production. In Warangal market, Red Chilli supply reported from April to 23rd May 2017, 950000 bags (1 bag = 40 Kgs) compared to same period last year 395500 bags. Before summer vacation in Guntur market Chilli arrivals on daily basis average reported around 90,000 – 1,00,000 bags. Over the next 6 months we expect it will come down to 35,000 – 40,000 bags. After summer vacation closure in Guntur market (mid 13th May to 11th June), Chilli supply will slowly come down and support prices and help it to recover to a level of around US$800 to US$870 per mt. lower end and upper end. Estimate for 2017-18, production 1.367 Million Tons. Current year we estimate after increasing exports and domestic consumption, ending stocks would be around 0.454 million tons as compared to last year 0.337 million tons.