The global chilli market is entering a period of heightened volatility and bullish momentum. Sharp reductions in acreage across India—especially in key producing states such as Andhra Pradesh, Telangana, and Karnataka—have fundamentally tightened supply. Farmers, discouraged by last year’s weak chilli prices, shifted land to alternative crops like maize and cotton. This, coupled with unfavourable weather conditions and localized flooding, has compounded production constraints and delayed new crop arrivals by nearly a month. The immediate impact is a pronounced rally in dry red chilli prices, with a robust 15% increase since July–August and ongoing firmness reflecting the limited stock movement and strong domestic demand.
Production is set to decline further in the 2024–25 season, pushing prices up as the market braces for late arrivals and uncertain export demand—particularly with China, traditionally India’s largest buyer, sitting on ample inventories. While local consumption varieties have attracted significant price gains, export-oriented grades have lagged due to subdued global orders. The outlook for the seasons ahead remains bullish as tight fundamentals and persistent weather risks keep supplies in check, placing upward pressure on both spot and contract prices.
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Chilli dried whole
bird eye, grade a
FOB 4.67 €/kg
(from IN)
Chilli dried
powder, grade a
FOB 4.42 €/kg
(from IN)
Chilli dried
flakes, grade a
FOB 4.38 €/kg
(from IN)
📈 Latest Chilli Market Prices
| Type | Grade/Variety | Origin | Location | FOB Price (EUR/kg) | Weekly Change | Update Date | Sentiment |
|---|---|---|---|---|---|---|---|
| Chilli dried whole | Bird Eye, Grade A (Organic) | India | New Delhi | 4.67 | +0.02 | 2025-10-03 | Bullish |
| Chilli dried powder | Grade A (Organic) | India | Andhra Pradesh | 4.42 | +0.02 | 2025-10-03 | Bullish |
| Chilli dried flakes | Grade A (Organic) | India | Andhra Pradesh | 4.38 | +0.02 | 2025-10-03 | Bullish |
| Chilli dried, with stem | – | India | Andhra Pradesh | 2.17 | +0.02 | 2025-10-03 | Bullish |
| Chilli dried, whole, stemless | Grade A | India | Andhra Pradesh | 2.20 | +0.01 | 2025-10-03 | Bullish |
🌍 Supply & Demand Dynamics
- Acreage Drops: India’s total chilli acreage down 30–50% in key states (AP, Telangana, Karnataka), with major varieties like Byadgi down 50% in Karnataka.
- Weather Delays: Delays of ~25 days in new crop arrivals due to late sowing and flooding in central and southern districts.
- Production Fall: Spices Board of India projects 2024–25 output at 2.69M tonnes (vs 2.91M tonnes last year).
- Stocks: Cold-storage inventory steady at ~15 million bags, but draw-down rates are high as arrivals slow.
- Export Slowdown: China’s lower spot activity weighs on export-focused grades like Teja; overall Indian exports face headwinds from competing supply and softer world demand.
📊 Fundamental Market Drivers
- Delayed Arrivals: Lent support to spot prices and limited availability in wholesale markets.
- Shift to Other Crops: Many farmers have rotated away from chilli after the price slump in 2024.
- Consumption Demand: Domestic buyers, especially for varieties like 5531, 341, 334, are actively sourcing, underpinning local markets.
- Speculative Interest: Bullish momentum likely to attract further speculative capital, with prices expected to remain volatile but upward biased until early 2026.
☀️ Weather Outlook: Key Growing Regions
- Andhra Pradesh & Telangana: Continued patchy rainfall is delaying late-stage sowing and crop growth, especially for January harvest. No major immediate frost risk, but below-average sunshine may dent quality.
- Karnataka: After excessive rains, drier weather is forecast for the next two weeks. However, recovery of lost acreage is unlikely; short-term yield potential remains capped.
- Madhya Pradesh & Maharashtra: Flood-affected areas are drying but will likely face subdued output; Ballari region stable.
- 3-Day Outlook: Mixed showers with moderate temperatures; no acute weather threats but field preparations slowed in central regions.
🌏 Global Production & Stock Comparison
| Country | 2023–24 Production (M Tonnes) | 2024–25 Production (M Tonnes) | Stock Trend |
|---|---|---|---|
| India | 2.91 | 2.69 (est.) | Flat to Lower |
| China | 2.01 | ~2.00 (est.) | Ample |
| Bangladesh | 0.17 | 0.18 (est.) | Steady |
| Papua New Guinea | 0.07 | 0.07 | Stable |
💡 Trading Outlook & Recommendations
- Buy on Dips: Strong fundamentals and delayed arrivals justify staggered accumulation for exporters and local processors.
- Hedge Risk: End-users should consider forward bookings through Q1–Q2 2026 to lock in current price levels.
- Monitor Weather: Continue to track rainfall and disease reports in main Indian regions—upside risk persists if further weather shocks occur.
- Exporters: Monitor China’s offtake as an early indicator for price resistance and potential ordering cycles into late 2025.
- Short-term Volatility: Expect choppy market action with a bullish underlying bias until arrivals normalize from late January onwards.
📆 3-Day Price Forecast (EUR/kg, FOB)
| Product | Current Price | Forecast Range |
|---|---|---|
| Chilli dried whole (Bird Eye, Grade A) | 4.67 | 4.65–4.75 |
| Chilli dried powder (Grade A) | 4.42 | 4.40–4.48 |
| Chilli dried flakes (Grade A) | 4.38 | 4.35–4.45 |
Outlook Summary: Prices are expected to remain firm to higher, especially for premium whole and powder varieties as arrivals lag and domestic buying persists.
