High Prices and Poor Quality Impact Sales

For some time now, traders across the country have been facing a pressing question: when will the slowdown in red chilli break? Traders believe that in Andhra Pradesh, due to the quality of this major grocery commodity being less than normal. And the price being comparatively high, its lifting has remained slow with no sign of this situation ending. Due to slow sales in the local market, traders believe that the price of red chilli may remain sluggish for now.

Factors Affecting Prices

Jugaraj Bhandari, a trader based in Guntur Mandi, Andhra Pradesh, said that due to the onset of the monsoon season, farmers have increased the sale of their red chilli crop slightly. This increased the arrival of red chilli in Guntur Mandi to about 60-70 thousand sacks. Despite the higher arrivals, prices remained stable.

Current Red Chilli Prices

In the Guntur Mandi, the prices are as follows:

• Teja red chilli: $1,98-$2,46 per kg
• 334 number: $1,80-$2,04 per kg
• 341 number: $1,80-$2,04 per kg
• Phatki: $0,96-$1,38 per kg.

Similarly, in the Warangal market of Telangana, the prices are:

• Teja red chilli: $2,04-$2,46 per kg
• Phatki: $0,98-$1,44 per kg

Due to slow sales in the local wholesale grocery market, red chilli number 334 has remained at the previous level of $2,40-$2,46 per kg. Recently, it had fallen by $0,12. Phatki and Teja red chilli have also remained at the previous closing levels of $1,20-$1,50 and $2,46-$2,64 per kg respectively. He further noted that due to the lighter quality of red chilli, the business of this major grocery commodity remains sluggish. Leading to a limited range of wholesale prices.

Export Demand Slows Down

Due to the lighter quality, exporter activities in red chilli also remain sluggish. Exporter activity is generally limited during the monsoon season. But this time poor quality has further reduced demand from countries except for traditional importers like Bangladesh and Myanmar. Even the demand from these traditional importing countries remains weaker than normal, contributing to the sluggish atmosphere in the red chilli markets.

According to the Spices Board data, in the initial month of the current financial year 2024-25 (April 2024), 43,472.28 tonnes of red chilli worth $10.19 million have been exported from the country. In the same month last year, 53,834.09 tonnes were exported, generating an income of $14.43 million. This shows a 19 percent decrease in quantitative export and a 29 percent decrease in income. Traders have been facing a slowdown in red chilli for several months and are now questioning when this slowdown will break, though no clear answer is available.

The red chilli market remains uncertain with high prices and poor quality impacting both domestic sales and exports. Traders are grappling with slow sales and fluctuating prices, with no immediate end in sight to the current slowdown. Close monitoring of market conditions and strategic adjustments will be crucial for stakeholders in the red chilli trade.