Chilli prices continue to slide

A bag of chillies was burnt by farmers in front of the market yard in Guntur on Tuesday in protest against the steep fall in prices

Chilli prices continued to slide at the Guntur Market Yard on Wednesday, marking a complete turnaround from 2011 when all the varieties of chilli commanded record prices.

Common varieties fetched a model price of Rs.5,800 a quintal, a drop of Rs.500 from Tuesday, while special varieties recorded a model price of Rs. 6,800, a slight increase from Rs.6,500 recorded on January 10.

The negative price triggered a sharp decline in chilli arrivals with just 7,512 bags (3,005 quintals) recorded on Wednesday against 15,510 bags (6,200 quintals) on Tuesday.

Irate farmers blocked the Guntur-Chilakaluripet road on Tuesday and burnt bags of chilli protesting against the steep fall in prices.

Incessant rains for the last two days further dampened the mood of the farmers, who are apprehending prospects of discolouration of chilli kept in the open to dry.

Trade sources attributed the steep decline in prices to some external factors, including fall in export demand, glut in chilli production in States such as Madhya Pradesh and a negative sentiment in futures trading.

Joint Collector N. Yuvaraj, who is the person-in-charge of the Guntur Market Yard, admitted that the chilli farmers, who were anxious about the prices, were bringing low-quality chilli to the yard. “I am convening a meeting of exporters soon and convince them about the need to offer better prices,” Mr. Yuvaraj told The Hindu.

The sharp fall in the model price of common varieties to Rs.5,000 in January this year from Rs.7,000 a quintal in 2011 has dampened farmers' mood.

Chilli acreage went up to 88,000 hectares from 65,000 hectares following the buoyant prices last year. The soaring prices in 2011 had even attracted farmers from other States to the chilli yard.

Even the model prices of special varieties of chilli have gone down with varieties such as Teja:6300 and Badiga:6800 fetching just above Rs.6,500 when compared with the record model prices of Rs.8,500 a quintal in 2011. The prices of Talu (low quality white chilli) have also dropped to Rs.3,000 from Rs.4,000 a quintal.

History was created in February 2011 when a farmer from Khammam sold special Badiga varieties for a record Rs.10,300 a quintal.

But arrivals are expected to pick up after the Sankranthi festival.

Secretary of the market yard V. Harinarayana expressed optimism that the market would bounce back in February when the yard would be flooded with special varieties of chilli stored in cold storage godowns.