Red Chilli

Red Chilli Price Surge: A Boon for Farmers Amidst Export and Demand Rise

Mintec Global
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The Heat is On: Price Surge Due to Growing Demand

The culinary and agricultural worlds are abuzz as red chilli prices experience a significant uptick, marking a 20 to 25 percent increase. This price jump, spurred by a rise in both exports and domestic demand, is shaking up household budgets and forecasts predict the trend may continue. With current market prices ranging from $1,80 to $2,28 per kg, the primary producers in Andhra Pradesh, Telangana, and Karnataka stand to gain considerably from this situation.

Weather Woes and Crop Challenges

Last year’s Cyclone Michuang wreaked havoc on crops in Andhra Pradesh and Telangana, while Karnataka’s red chilli cultivation suffered due to insufficient rainfall. Despite an increase in cultivation area, these challenges suggest a potential decline in red chilli production, further fuelling the price increase amidst robust demand and exports.

Recovering Prices and Export Success

Hyderabad businessman Periya recounts a period of declining prices, with a drop of about 40 percent, followed by a recent rebound of 20 to 25 percent across various red chilli varieties. Although prices are still roughly 20 percent below last year’s figures, the export market is thriving, particularly for the Teja variety, which is in high demand in China. Sambasiva Rao Velagapudi, from the All India Chilli Exporters Association, notes a notable increase of $0,24 per kg in the last month, as stockists accumulate the new crop.

Varietal Impact and Production Estimates

The Byadagi chilli, renowned for its vibrant colour and mild heat, is making waves in Karnataka, where it is extensively cultivated. Despite an approximate 12 percent increase in red chilli cultivation area, overall production is projected to dip by about 5 percent due to climatic adversities. Meanwhile, Basavaraj Hampali, a trader from Hubli, highlights the fluctuating prices of the Byadagi variety, with current rates at around $516, a decrease from the previous month’s $576.

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