The red chilli market experiences a revival, fueled by concerns over the crop's size and heightened demands from exporters and stockists. Initial expectations of abundant yields dimmed as crop health concerns emerged, pushing prices up by 20-25%. The three key producers, Andhra Pradesh, Telangana, and Karnataka, witness increased acreages, yet overall yields may fall, indicating a turbulent season for red chillies.

Chinese Appetite and Global Stocking Up Drive Prices Higher

Exporters rejoice as shipments, especially the Teja variety sought by China, surge. A robust demand from China contributed to a price hike last month. Stockists, eyeing the new crop, further drive the market up. However, this comes with a twist, as the overall crop size may only see a modest 10% increase, falling short of initial optimistic estimates.

Teja Takes the Lead In China

Teja, India's chilli star in exports, gains favor in the Chinese market, contributing to the surge in the market. While exports continue to thrive, India's chilli shipments set a record high in 2022-23. However, despite the positive export trend, this year's prices remain 20% lower than the previous year's, although rallying.

Cyclone Miachaung's Impact on Chilli Yields

Experts highlight the dual impact of increased acreages and the aftermath of Cyclone Miachaung in Andhra and Telangana. These and Karnataka's rainfall deficit lead to a potential 5% decrease in overall yields. As a result, prices have steadily risen over the past 20 days.

Karnataka's Byadgi Chilli Faces Market Fluctuations

In Karnataka, the Byadgi chilli variety, known for its vibrant colour and milder taste, witnesses fluctuating prices. Increased market arrivals are met with cautious buying from masala companies, causing the price of the variety to dip significantly.

Estimates and Expectations Of Chilli Crop

According to the second advance estimates for 2022-23, India's red chilli crop is expected to exceed 2.059 million tonnes. Andhra Pradesh leads with 0.767 million tonnes, followed by Telangana at 0.506 million tonnes and Madhya Pradesh at 0.322 million tonnes. Karnataka contributes an estimated 0.167 million tonnes to the overall production of chilli.

Conclusion

The red chilli market witnessed a resurgence due to concerns over crop size and heightened global demands. These demands are from exporters and stockists alike. Despite initial expectations of ample yields, emerging crop health issues push prices up by 20-25%. While exports to China surge, overall yields may only see a modest 10% increase. These figures dampen earlier optimism.

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