Chilli Market Sinks Amid Sharp Drop in Sowing and Prices: Outlook Remains Subdued

The global chilli market is under intense pressure, with recent weeks delivering a sharp blow to both farmers and traders. Leading producing states in India—Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, and Maharashtra—are witnessing a stark fall in sowing as prices remain depressed and demand shows little sign of revival. In regions like Madhya Pradesh, sowing is nearly half of last year, while Telangana reports a 35–40% drop. Farmers are reacting to losses sustained from the ongoing weakness in chilli prices, opting to shift acreage to more profitable crops such as soybean and maize. Meanwhile, the average trade price for quality red chillies is now $1.45–$1.80 per kg, down sharply from early-year highs, with even premium varieties such as Teja and Syngenta feeling the pinch. As sowing contracts and inventories start to thin, concerns mount over potential supply crunches and an eventual price rebound in the coming season.

For now, however, sluggish trade flows, weak export demand, and broader market uncertainty weigh heavily on the outlook, reinforcing bearish sentiment and prompting many to question just how long the downturn can last.

📈 Prices

Product	Type	Origin	Location	Latest Price (EUR/kg)	Previous Price (EUR/kg)	Weekly Change	Sentiment
Chilli dried whole	Bird eye, Grade A	India	New Delhi	4.79	4.80	-0.21%	Bearish
Chilli dried powder	Powder, Grade A	India	Andhra Pradesh	4.53	4.54	-0.22%	Bearish
Chilli dried flakes	Flakes, Grade A	India	Andhra Pradesh	4.50	4.51	-0.22%	Bearish
Chilli dried with stem	With stem	India	Andhra Pradesh	2.24	2.25	-0.44%	Bearish
Chilli dried whole stemless	Whole, stemless, Grade A	India	Andhra Pradesh	2.27	2.28	-0.44%	Bearish

🌍 Supply & Demand

• Madhya Pradesh: Sowing nearly 50–55% lower year-on-year—sharpest drop among major states.
• Telangana: Sowing is down by 35–40%, with risks of further declines if prices do not recover soon.
• Andhra Pradesh, Karnataka, Maharashtra: All report reduced sowing and significant sentiment shift toward alternative crops.
• Demand: Remains sluggish in both domestic and export markets, with weak offtake from buyers as stocks are ample.
• Alternative Crops: Noticeable acreage shift to soybean, maize due to better price prospects and risk aversion.

📊 Fundamentals & Market Drivers

• Price declines across all major chilli varieties (e.g., Teja, 334, Syngenta, Wonder Hot) due to oversupply and diminishing demand.
• Traders report slow and steady decline, with little speculative interest in price recovery short-term.
• India—world’s largest producer and exporter—experiencing one of the deepest acreage cuts in a decade.
• Inventories remain comfortable for now; however, if sowing falls further, inventories may drawdown rapidly toward the end of the marketing year.

☀️ Weather & Regional Outlook

• Telangana & Andhra Pradesh: The Indian Meteorological Department reports near-average to slightly above-average rainfall, aiding sown crop health; however, the acreage under cultivation remains a major concern.
• Madhya Pradesh: Wetter-than-average monsoon may help any late plantings but will not overcome the sharp acreage decline this season.
• Long Range: Stable to positive growing conditions; risk is now more about insufficient acreage than weather adversity.

🌏 Global Production & Stock Comparison

• India: Expecting a significant drop in 2025 output if current sowing patterns persist. Stocks are currently adequate, but export volumes could decrease in coming quarters.
• China & Southeast Asia: Stable production trends, but Indian squeeze could tighten global supply and benefit other exporters.
• Major Importers: US, Middle East, and EU buyers are likely to monitor Indian developments closely for potential supply shortfalls into 2025.

📌 Trading Outlook & Recommendations

• Bears dominate near-term outlook; further downside risk possible if demand deteriorates further or export channels remain slow.
• Monitor sowing data—any severe additional falls could shift sentiment bullish for later in the crop year.
• Opportunities may arise for inventory holders to lock in prices if signs of bottoming emerge later in the season.
• Exporters advised to cover forward shipments selectively.
• Buyers may consider accumulating at these multi-month lows for long-term needs, but watch for further dips.

📆 3-Day Regional Price Forecast (FOB India)

Date	Dried Whole (EUR/kg)	Dried Powder (EUR/kg)	Dried Flakes (EUR/kg)
Day 1	4.78 – 4.80	4.52 – 4.54	4.49 – 4.51
Day 2	4.77 – 4.80	4.52 – 4.53	4.49 – 4.50
Day 3	4.76 – 4.79	4.51 – 4.53	4.48 – 4.50

Short-term forecast: Market tone remains negative; spot prices likely to trade within a narrow range but carrying moderate downside risk until supply cuts become more apparent or export demand revives.