Deep Depression Hits Andhra Chilli Belt but Prices Stay Under Pressure

Heavy rain and gale-force winds from a deep depression over the Bay of Bengal are raising concerns about red chilli crop damage in coastal Andhra Pradesh, but weak export demand and season-end quality issues are preventing any major price spike for now.

Prolonged dry conditions in Andhra Pradesh have been abruptly replaced by intense rainfall and strong winds since September 23–24, particularly around Visakhapatnam, Rajahmundry and Guntur. Authorities report widespread damage to crops and infrastructure across coastal districts, but concrete estimates for chilli losses are not yet available. At the same time, arrivals at Guntur market have fallen sharply, yet prices remain broadly stable as export buying stays muted and buyers discount late-season quality. With India’s red chilli exports already well below last year’s levels, the near-term market balance still looks more weighted toward demand weakness than tight supply.

Prices

Despite a reported 50% drop in daily arrivals at Guntur to about 20,000–25,000 bags, from roughly 50,000 bags earlier, spot prices have shown only marginal firming. The main reason is subdued export demand and buyer caution on late-season quality.

FOB quotations from India in EUR remain broadly steady to slightly higher since early September. In Andhra Pradesh, conventional dried chilli whole stemless grade A is quoted at EUR 2.14 FOB and with stem at EUR 2.13 FOB, only a modest uptick from early September levels. Organic chilli powder grade A from Andhra Pradesh stands at EUR 4.33 FOB, and organic flakes at EUR 4.32 FOB, while organic bird’s eye whole grade A ex-New Delhi is indicated at EUR 4.57 FOB as of September 19, 2026.

Supply & Demand

Strong winds of around 50–70 km/hour and very heavy rainfall have affected key chilli-growing areas in coastal Andhra Pradesh, including zones around Visakhapatnam and Rajahmundry, where several districts recorded more than 10–20 cm of rain within 24 hours. Authorities confirm crop damage across more than 200,000 hectares statewide, though a crop-wise breakdown is still pending.

In the chilli trade, the immediate visible effect has been logistics disruption and sharply lower arrivals at Guntur, where volumes reportedly halved to about 20,000–25,000 bags. This comes on top of a seasonal downtrend in arrivals as most of the current marketing year’s crop has already moved, and stocks in cold stores remain available. Earlier in the season, analysts had already noted lower daily arrivals as the 2025–26 crop tapered off.

On the demand side, India’s red chilli exports in the first two months of FY 2026/27 reached 119,438 tonnes, down from 185,011 tonnes a year earlier — around 35% lower. Weak buying from key destinations, including China, and competition from other origins have contributed to this slowdown. The combination of softer export demand and some consumer resistance to elevated rupee prices means that even weather-related supply scares are not translating into strong spot price rallies.

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Fundamentals & Weather

The deep depression that made landfall near Kalingapatnam has narrowed Andhra Pradesh’s monsoon rainfall deficit by around 10 percentage points, bringing previously deficient districts such as Srikakulam, Vizianagaram, Visakhapatnam and Guntur closer to normal seasonal rainfall. While positive for soil moisture and upcoming sowings, the intensity of the current spell raises risks of lodging, pod drop and waterlogging in standing chilli fields, particularly in low-lying pockets.

For the next couple of days, meteorological updates still flag pockets of heavy rain over north coastal Andhra Pradesh, although the system is gradually moving away and weakening as it tracks toward Odisha and inland areas. Once waters recede, field assessments will better clarify how much of the chilli crop has been affected versus merely delayed for harvest. Until then, market participants are likely to price in localized damage but assume that overall Indian availability remains ample due to sizable stocks and production in other states like Telangana and Karnataka.

Short-Term Outlook & Trading Ideas

The immediate market narrative is a tug-of-war between weather-related supply concerns and structurally weak export demand. The baseline expectation is that weak exporter activity and declining late-season quality will continue to cap any upside, even if crop damage headlines persist.

• Importers / Users: Consider using the current weather-induced uncertainty to secure short-term coverage while prices remain broadly stable. Focus on higher-quality lots before season-end deterioration becomes more pronounced.
• Exporters: Exercise patience on aggressive forward offers until there is clearer visibility on crop losses and any recovery in Chinese and other Asian demand. Differentiating by quality and origin (e.g., better-looking lots from less-affected inland areas) will be key.
• Producers: Prioritize field drainage and post-rain crop management to minimize disease and quality losses. Where practical, staggered harvesting after fields dry can preserve colour and pungency, supporting premiums in a market that is currently rewarding quality over volume.

3-Day Market Direction (Key Indian References)

• Guntur physical market: Arrivals may remain disrupted in the next 2–3 trading days, but prices are likely to trade sideways with a slight firm tone for top-quality lots only; average grades remain under pressure from weak export demand.
• FOB Andhra Pradesh (conventional whole): Sideways to mildly firmer bias as logistics normalize and traders reassess crop damage, but no strong rally expected without a clear export demand pickup.
• FOB premium organic products (powder, flakes, bird’s eye): Stable with a modestly supportive undertone, driven more by niche demand than by the current weather event.