Chilli prices have gained over Rs 300 a quintal in the last couple of weeks as Pakistan has begun buying more of the spice from India.
“Buying by Pakistan is 10-12 truckloads (15 tonnes each) every day. Due to this, the medium best quality price has increased to Rs 8,000 a quintal,” said Mr Abhishek Bhandari, a chilli trader from Guntur.
With medium-quality chilli gaining, prices of superior varieties are now ruling around Rs 10,000 a quintal.
Pakistan is a regular buyer of Indian chilli and enters the markets at least once a quarter. “For the current quarter, it has entered now helping to push up prices further,” said Mr Bhandari.
In Guntur spot market, chilli was quoted at Rs 8,993.15 a quintal on Monday against Rs 8,870 on Saturday.
On the National Commodities and Derivatives Exchange, October contracts gained Rs 272 a quintal at Rs 8,762, while November contracts ended at Rs 8,498, up Rs 210.
“Usual export demand continues from Malaysia and Singapore,” said Mr Bhandari.
Good buying in the domestic market, too, is lending support to chilli. However, buying by traders from Rajasthan and Bihar is slow.
According to Karvy Commodities Trade, domestic demand is stable, though export demand seems to be week. Chilli seems to be benefitting from reports of lower sowing of the crop in Andhra Pradesh. According to Andhra Pradesh Government data, chilli has been sown in 93,000 hectares against 1.52 lakh hectares during the same period a year ago.
“Rain has been delayed. Therefore, sowing is lagging,” said Mr Bhandari.
The chilli crop begins arriving from February onwards with sowing being done now.
On the other hand, traders have ample stocks of chilli. “Those who hold stocks had bought at a higher price of Rs 10,000 a quintal and may not be interested to sell now,” said a trader.
The average annual production of chilli is 13 lakh tonnes, with Andhra Pradesh alone accounting for 7.5 lakh tonnes.