High De­mand may Curb Fall in Chilli Prices

The Economic Times - - Finance & Commodities - Kr­ish­naku­mar.PK@ times­group.com

Kochi: Red chilli prices have halved in a year as ex­tended cul­ti­va­tion in key grow­ing states of Kar­nataka, Andhra Pradesh and Te­lan­gana has in­creased sup­ply but higher de­mand from spices mak­ers and the in­ter­na­tional mar­ket may ar­rest the fall.

Pro­duc­tion is es­ti­mated to be higher by 20% in the three states where har­vest is in full swing. Prices for the pre­mium va­ri­ety Teja, which is largely ex­ported, have plunged to .₹ 80 per kg from .₹ 140 per last year, prompt­ing a rush from ex­porters to buy the spice. “There is strong de­mand es­pe­cially from China and Viet­nam,” said A P Mu­ru­gan, di­rec­tor of Paprika Oleos (In­dia), a ma­jor ex­porter. As a re­sult of the heavy pur­chases, the in­dus­try feels prices could sta­bilise around the cur­rent level. Av­er­age prices of other va­ri­eties of chill­ies have dropped to around .₹ 74 per kg. Curry masala com­pa­nies have also started buy­ing on a large scale with the drop in prices. Last month, when har­vest started, pur­chases were sluggish in the ab­sence of large buy­ers fol­low­ing de­mon­eti­sa­tion.

As a re­sult of the heavy ex­port de­mand, the in­dus­try feels prices could sta­bilise around the cur­rent level

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