Chilli Market Faces Persistent Price Pressure Amid Large New Crop Arrivals

Red chilli markets are in a decisive phase this season, with prices facing persistent downward pressure as heavy arrivals of the new crop stream into India’s major mandis. The surge in supply, primarily from powerhouse states such as Andhra Pradesh, Telangana, Karnataka, and Maharashtra, is dominating the market narrative. The resulting glut means that prospects for a price rebound are, at least for now, rather slim. Traders and processors are encountering a buyers’ market—with steady but not buoyant domestic demand and only selective export interest, buyers are leveraging the ample supply to negotiate harder and keep rates under check. This season is also notable for a projected increase in overall production, driven by expanded acreage and favorable growing conditions. However, premium qualities are holding relatively better in terms of pricing, while lower grades are under more intense pressure. Given these dynamics, the chilli market is poised for continued softness in the short term, with any potential for recovery depending on a slowdown in arrivals, robust export orders, or sudden weather disruptions. For now, caution and patience are guiding the outlook for market participants.

📈 Prices

Product	Type / Grade	Origin	Delivery Terms	Latest Price (EUR/kg)	Previous Price (EUR/kg)	Weekly Change (%)	Market Sentiment
Chilli dried whole	Bird eye, Grade A, Organic	IN, New Delhi	FOB	4.63	4.65	-0.4%	Weak
Chilli dried	Powder, Grade A, Organic	IN, Andhra Pradesh	FOB	4.38	4.40	-0.5%	Weak
Chilli dried	Flakes, Grade A, Organic	IN, Andhra Pradesh	FOB	4.33	4.35	-0.5%	Weak
Chilli dried	With stem	IN, Andhra Pradesh	FOB	2.14	2.15	-0.5%	Very Weak
Chilli dried whole	Stemless, Grade A	IN, Andhra Pradesh	FOB	2.13	2.15	-0.9%	Very Weak

🌍 Supply & Demand

• Heavy arrivals: New crop arrivals are robust in Andhra Pradesh, Telangana, Karnataka, and Maharashtra, with Guntur and other hubs reporting consistently high volumes.
• Domestic demand: Remains steady but not aggressive; traders and processors are meeting needs without building stocks aggressively.
• Export demand: Selective and mainly driven by price competitiveness on the global stage. No broad-based surge in overseas buying reported.
• Quality-based pricing: Premium grade chillies are faring better than medium and lower grades, but all segments are under pressure due to oversupply.

📊 Fundamentals

• Production outlook: New crop output is forecasted higher than last year, thanks to expanded sowing.
• Arrivals vs. prices: Unless arrivals decelerate or demand strengthens notably, prices are expected to stay under pressure.
• Trader sentiment: Cautious, with buyers pushing for lower rates and waiting to see if the supply pressure eases.

🌤 Weather Outlook

• Current conditions: Key producing states are not experiencing any major adverse weather events, enabling uninterrupted harvest and market arrivals.
• Impact: Should any unexpected rain or unseasonable weather hit these regions, arrivals could slow and support prices, but the immediate outlook remains stable.

🌎 Global Production & Stocks

• India’s leading role: India remains the world’s largest chilli producer, and a bumper harvest reinforces export competitiveness but also weighs on prices globally.
• Major importers: The selective export demand—driven by global price trends—means India’s stocks will likely remain ample, unless international buyers become more active.

📆 Trading Outlook & Recommendations

• Expect red chilli prices to remain soft in the coming weeks, barring weather disruptions or a demand surprise.
• Monitor arrivals closely; a sustained slowdown could flag the bottom of the market.
• Premium quality and export-grade lots may present slightly better resilience in pricing.
• Processors should secure stocks opportunistically but avoid over-committing at current supply levels.
• Exporters should track global price competitiveness for windows of opportunity on short-term deals.

⏰ 3-Day Regional Price Forecast (FOB India, EUR/kg)

Product	Current Price	Day 1 Forecast	Day 2 Forecast	Day 3 Forecast	Trend
Chilli dried whole (Bird eye, Grade A, Organic)	4.63	4.60	4.58	4.55	Soft
Chilli dried (Powder, Grade A, Organic)	4.38	4.36	4.34	4.31	Soft
Chilli dried (Flakes, Grade A, Organic)	4.33	4.30	4.28	4.25	Soft