Subdued Demand Keeps Chilli Prices Under Pressure as Supply Remains Adequate

Amid a period traditionally marked by heightened trading activity, the red chilli market in India is grappling with subdued momentum as both domestic and export demand show persistent weakness. Trade dynamics at major hubs, especially Guntur, indicate that farmers and traders are experiencing a slowdown in buying interest. This lethargy has resulted in only minor price corrections, counteracting the earlier gains seen in top-quality grades. High-quality red chilli prices, after previously touching the $192 per quintal mark, have now softened to $156–186 per quintal, while medium varieties hover between $120–144 per quintal.

The market’s muted tone points towards adequate arrivals from regions like Andhra Pradesh and Telangana, matching the moderate procurement pace. Key domestic consuming states—Maharashtra, Gujarat, and Madhya Pradesh—are witnessing limited buying, further contributing to the lacklustre sentiment. Notably, export demand, especially from significant international buyers such as China and Bangladesh, remains slow, exerting sustained pressure on prices. Looking forward, industry analysts highlight that unless there is a notable uptick in export orders or a significant drop in arrivals, prices are likely to remain soft. Weather developments in major growing belts and purchase strategies by large exporters are poised to be decisive factors for any potential turnaround.

📈 Prices & Market Sentiment

Market/Type	Grade	Location	Current Price	Previous Price	Weekly Change	Currency	Sentiment
Guntur (Spot)	Premium	IN	$156–186	$162–192	-4% to -3%	USD/quintal	Bearish
Guntur (Spot)	Medium	IN	$120–144	$122–150	-2% to -4%	USD/quintal	Bearish
New Delhi (FOB)	Bird Eye, Grade A, Organic	IN	4.68	4.71	-0.03	EUR/kg	Weak
Andhra Pradesh (FOB)	Powder, Grade A, Organic	IN	4.42	4.45	-0.03	EUR/kg	Weak
Andhra Pradesh (FOB)	Flakes, Grade A, Organic	IN	4.39	4.42	-0.03	EUR/kg	Weak
Andhra Pradesh (FOB)	With Stem	IN	2.18	2.21	-0.03	EUR/kg	Weak
Andhra Pradesh (FOB)	Whole, Stemless, Grade A	IN	2.21	2.24	-0.03	EUR/kg	Weak

🌍 Supply & Demand Drivers

• Arrivals: Steady inflows from Andhra Pradesh and Telangana continue to fulfil market requirements, limiting upward price action.
• Domestic Demand: Consumer demand remains tepid in key states (Maharashtra, Gujarat, Madhya Pradesh), with buyers holding back in anticipation of lower prices.
• Exports: International demand—especially from China and Bangladesh—has decelerated, negatively impacting prices.
• Stock Positions: Sufficient inventories at both farm and mandi levels prevent scarcity-led rallies.
• Speculative Activity: Limited speculative buying in the absence of bullish cues from the export or domestic fronts.

📊 Fundamental Data

• Earlier premium prices had peaked at $192/quintal for the best-quality chillies; the decline signals current oversupply and demand lag.
• Medium- and lower-grade chillies are particularly pressured by demand-side weakness.
• Comparing current values with the last market report shows a continued downward drift with no signs of quick recovery.

⛅ Weather Outlook & Crop Impact

• Meteorological forecasts indicate average rainfall in Andhra Pradesh and Telangana over the next week, supporting healthy crop development and steady arrivals.
• No severe weather threats are currently predicted for these regions; if normal monsoon patterns persist, supply will likely remain adequate.
• Watch for sudden weather anomalies (unseasonal rain, heatwaves) that could disrupt harvests or drying, which would shift the supply-side calculus.

🌐 Global Production & Inventory Comparison

• India remains the world’s top chilli producer, with current output and stocks ample enough to meet both domestic and major export commitments.
• Bangladesh, China, Vietnam: Current demand from these key buyers is subdued, contributing to excess availability in Indian mandis.
• No major disruption in global supply chains is reported; price pressure is primarily from slack demand rather than shortage risk.

🔎 Comparative Review: Last Market Report

• The most recent previous report also pointed to weak demand as the principal bearish driver in the market.
• Price softness has intensified in this cycle, with even premium varieties unable to hold earlier levels.
• Short-term outlook remains unchanged: little upside without alteration in global or domestic buying.

📆 Trading Outlook & Recommendations

• 🔻 Sellers: Avoid offloading large stocks at current rates; consider staggered sales or wait for a potential export revival.
• 🔻 Exporters: Monitor international inquiries—especially from China and Bangladesh—for signals of recovery before committing to bulk contracts.
• 🔄 Buyers/Processors: Favor spot procurement as prices are unlikely to rise in the near term; negotiate hard for premium grades.
• ⚠️ Monitor weather updates regularly as any deviation from forecast norms could change supply quickly.
• 🔍 Stay updated on government procurement or support programs; interventions could add short-term support to prices if announced.

🗓️ 3-Day Regional Price Forecast

Date	Guntur (Premium)	Guntur (Medium)	FOB India (Bird Eye, Grade A)	FOB India (Powder, Grade A)
Day 1	$156–186	$120–144	€4.68/kg	€4.42/kg
Day 2	$155–184	$119–143	€4.65/kg	€4.39/kg
Day 3	$154–183	$118–142	€4.62/kg	€4.37/kg