Chilli prices in the spot and futures market turned hot on Friday on demand from stockists.
With the monsoon being deficient, traders and stockists fear a supply shortage. Besides, production could also be lower this year. This is because some farmers in Andhra Pradesh could return to growing rice after having shifted to chilli last year.
Though arrivals are a little higher at 35,000 bags against sales of 28,000 bags, buying by stockists is boosting prices.
In Guntur, chilli was quoted at Rs 5,768.20 a quintal in the spot, up Rs 33 over the previous close.
On the National Commodities and Derivatives Exchange, chilli for August delivery opened higher at Rs 5,454 a quintal against Thursday's close of Rs 5,382. September contracts increased to Rs 5,656 against Rs 5,558.
Analysts see chilli prices hotting up further.