This year, the Indian chilli market is facing an extraordinary upheaval, with the chilli-growing regions of Saurashtra, Gujarat, recording an unprecedented collapse in acreage. Delayed and erratic monsoon rains, combined with extreme heat, have drastically reduced the area sown under chilli – down by as much as 75–80% compared to last season. Farmers, grappling with prolonged dry spells and the threat of crop failure, are rapidly switching to alternatives such as cotton and groundnut that offer greater market stability and require less water. Reports from local agriculture departments indicate that in key districts acreage has shrunk from 30,000 to just 7,000 hectares, spelling substantial reductions in the volume likely to reach markets later in the year.
These dramatic shifts will have knock-on effects across the chilli supply chain, raising concerns about a looming supply squeeze just as demand typically builds ahead of the peak festival and export seasons. Current price data already show a steady uptick in both whole and processed chilli products within key Indian producing regions. While the situation remains dynamic, the prospects of diminished domestic availability and potentially volatile export flows are spurring traders and buyers into heightened vigilance.
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Chilli dried whole
bird eye, grade a
FOB 4.85 €/kg
(from IN)
Chilli dried
powder, grade a
FOB 4.59 €/kg
(from IN)
Chilli dried
flakes, grade a
FOB 4.56 €/kg
(from IN)
📈 Prices & Market Sentiment
| Product | Type | Origin | Grade | Location | Current Price (EUR/kg) | Weekly Change | Market Sentiment |
|---|---|---|---|---|---|---|---|
| Chilli dried whole | Bird eye | IN | Grade A, organic | New Delhi (FOB) | 4.85 | +0.03 | Bullish – Strong local supply concerns |
| Chilli dried powder | – | IN | Grade A, organic | Andhra Pradesh (FOB) | 4.59 | +0.03 | Bullish – Rising ahead of festival season |
| Chilli dried flakes | – | IN | Grade A, organic | Andhra Pradesh (FOB) | 4.56 | +0.03 | Bullish – Supply tightening |
| Chilli dried with stem | – | IN | Conventional | Andhra Pradesh (FOB) | 2.30 | +0.03 | Firm – Local substitution impact |
| Chilli dried whole, stemless | – | IN | Grade A | Andhra Pradesh (FOB) | 2.33 | +0.03 | Firm – Diminishing stocks |
🌍 Supply & Demand Drivers
- 📉 Plunging Saurashtra acreage: Down 75–80%, major shift to less water-intensive crops.
- ☀️ Delayed monsoon & erratic weather: Prolonged dry spells undermining sowing and stand establishment.
- 🌱 Shift to alternate crops: Cotton and groundnut are absorbing much of the released land, limiting hopes of a mid-season rebound.
- 💡 Export demand: Stable demand from key export markets, especially Southeast Asia and the Middle East, expected to support price floors.
- 🥘 Domestic consumption: Forecast to rise as festival period nears, potentially tightening the market further if weather does not improve rapidly.
📊 Underlying Fundamentals
- 🧾 Government data: Official acreage figures confirm severe local contraction; preliminary government estimates align with field reports.
- 📦 Stocks: Inventories at cold storage are trending lower YOY, as last year’s carryover has largely cleared.
- 🔄 Speculative activity: Uptrend in forward buying and hedging by processors and exporters, anticipating further tightness.
| Region | 2024 Cultivation (ha) | 2025 Cultivation (ha) | Change (%) |
|---|---|---|---|
| Saurashtra (IN) | 30,000 | 7,000 | -76.7% |
| Andhra Pradesh (IN) | Stable | Stable | 0% |
| Global major exporters | Stable | Down slightly | -1.5% |
| China (select provinces) | Stable | Stable/Likely lower | -2–3% |
🌦️ Weather & Yield Outlook
- 🔴 Saurashtra (Gujarat): Forecast for next week remains below-average rainfall; risk of further dry stress if monsoon does not resume promptly.
- ☁️ Andhra Pradesh: Isolated showers, mostly adequate for established crops but vigilance is needed for late-sown lots.
- 🛰️ Global: China and Southeast Asia show seasonal patterns; marginal yield threats from localised storms.
Implications: Chilli output in Saurashtra will be significantly below normal. If dry weather persists, even irrigated fields risk lower productivity, exacerbating supply tightness into late 2025.
🌐 Global Overview
| Country | 2024/25 Production (est. MT) | Stocks (MT) | Export Share (%) |
|---|---|---|---|
| India | 1,600,000 | 230,000 | 28% |
| China | 1,400,000 | 180,000 | 22% |
| Mexico | 250,000 | 80,000 | 11% |
| Turkey | 90,000 | 30,000 | 5% |
| Bangladesh | 120,000 | 21,000 | 4% |
📆 Trading Outlook & Recommendations
- 🟢 Buyers: Consider forward contracts for Q4 delivery; low carryover stocks and field news argue for early cover, especially for premium grades.
- 🟠 Sellers: Hold for further price appreciation; new crop arrivals likely to be delayed and smaller in size.
- 🔴 Exporters: Monitor weather developments in Gujarat and plan logistics for potentially higher volatility.
- 🔒 Importers: Diversify sources to hedge against Indian supply risk; scout alternative origins in Southeast Asia where possible.
⏰ 3-Day Regional Price Forecast
| Location | Product | Current Price (EUR/kg) | 3-Day Forecast (EUR/kg) | Direction |
|---|---|---|---|---|
| New Delhi (IN) | Chilli dried whole (organic, bird eye) | 4.85 | 4.87–4.90 | ⬆️ |
| Andhra Pradesh (IN) | Chilli powder (organic, grade A) | 4.59 | 4.62–4.65 | ⬆️ |
| Andhra Pradesh (IN) | Chilli flakes (organic, grade A) | 4.56 | 4.59–4.62 | ⬆️ |
Overall, expect short-term price appreciation amid intense supply-side stress. Prospects hinge critically on wet-season weather recovery in the coming month.
