Archive for May 6th, 2010

CHILLI

Description

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Chilli is the dried ripe fruit. It is widely distributed in all tropical and sub-tropical countries including India.

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Production in india

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In India, Chilli is a kharif season crop and an important cash crop. It is grown in all parts of India covering about 7,33,800 hectares. The harvesting season starts in January and arrivals peaking in February-April. Sowing is held mainly during August-October. Several varieties of chillies are cultivated in India. Sanam, Bydagi, Wonder, Hot, Jwala and LC334 are the most popular amongst them.

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India is the largest producer and consumer of chilli in the world contributing nearly 50 percent of the global output. So any decline in output would have an immediate impact on prices. Climatic conditions are also the major variables which make chillies hotter.

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In peak season, nearly one billion bags of chillies (a bag contains 35-50 kg) worth Rupees 500 crore arrives in the Guntur market. Other major markets are Khammam and Warangal in Andhra Pradesh and Bellary and Raichur in Karnataka.

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According to the Spices Board, Consumption of chilli is increasing substantially as the branded powder sales growing at a compound annual growth rate of 11%.

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Over 30 percent of chillies produced in India are converted into powder.

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International Scenario

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In chillies, the major producing countries are India, China, Peru, Bangladesh, Hungary and a few others. Production of major countries is growing at a CAGR of 5.2 percent. World trade in chillies is put at 4 lakh tonnes. The Indian share in global production range from 50-60 percent, China and Peru are growing fast and Hungary shows a de-growth. However, India is the only one source for hot chillies.

Export Scenario

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India is a major exporter of chillies with major destinations of West Asia, Far East, USA, Sri Lanka and Bangladesh. India also exports chillies oleoresins in good quantities.

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In the first half of 2009-10, exports to Pakistan were nil as against 22,000 tonnes during the year-ago period. Indian chilli exports fell in the first half of the current financial year as China importing it from the Pakistan market. Chilli exports picked up from October and during January 2010, India exported around 17,500 tonnes valued Rs 120 crore as against 11,500 tonnes valued at Rs 69 crore. In long term, exports are likely to increase as the Chinese production is on the lower side.

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Current scenario

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The total stock position of chilli in Guntur mandi of Andhra Pradesh at 48 lakh bags against 25 lakh bags reported last year in the same period. The total production of chilli in the current year is also likely to be around 1.68 lakh bags against 1.25 lakh bags reported last year due to steady prices of chilli during the sowing period.

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Currently chilli prices are trading in pressure as arrivals increase. But good demand and cold chain facilities developed by affluent farmers are likely to help stabilise the chilli prices. Heavy arrivals also promote more exports on lower prices. The forward month contract is trading in contango (i.e prices of next month contract is higher than the most active traded current month contract.

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The active June contract chilli futures made a low of Rs.4520 per quintal from a high of Rs.5500 per quintal and declining by 21.68 %. Chilli future (June_NCDEX) has seen a drastic fall in regards to volume, from 2000 lots to 400 lots in these days, while the open interest has seen a continuous rise.

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