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MARKET ANALYSIS, CROP REPORT & OUR PRICES

Market Report on Indian Chillies

Our intention is to provide detailed, transparent and upto date information about the ongoing price positioning in the Indian Chilli Markets, insightful Crop Reports to support you in designing your informed business strategy for your firm and your customers. And occassionally, we will also update our chilli products prices. We do hope this information positively supports you.

CHILLI CROP REPORT CHILLI MARKET RATES TREND ANALYSIS OUR PRICES

2019-20 Indian Chilli Crop Report

As of Dec-15, 2019.

MP arrivals are a cause of concern - Chilli Prices to stay high until Jan 10th - Virus & Crop Damage Reported in Telangana could affect crop yield.

We have seen increased new crop arrivals this week. But we will most likely witness similar higher chilli prices until Jan 2nd week. Though the new arrivals have increased, about 80% of the material is last grade and rain touch chillies. Quality New Crop Chillies are hardly seen in the market yet. With continuous demand for local consumption and export requirements (particularly seen in SriLanka, Bangladesh, China & Vietnam.) and very low stock in all the south, it is highly unlikely that the prices will go down in the next few days.


CROP AREA (4 States - appx range compared to last year's)

%

RAINFALL & WATER AVAILABILITY

%

CURRENT STOCK (3 States, MP excluded. Appx Range only)

%

CROP DAMAGE (Overall. 4 States)

%

Traders are also concerned about crop yield particularly reported from Telangana, as the virus effect reported last  week has spread from the Godavari border belt and reached the inner areas too. Weather which was conducive until a couple of weeks is not supportive at the moment. We are witnessing relatively hotter days which is not at all good for chilli crop. It has to consume the effects of ideal winter weather for good crop and higher yields. And with the present situation this seems unlikely. Traders are already estimating crop yield to be around 15 Quintals.

The next few days are crucial for the crop output. If the weather continues this way or if the virus spreads and damages the crop significantly, prices will not go down until Feb 1st week.

We are already witnessing low crop yield in MP & Maharashtra states. Karnataka crop has also had about 30% to 35% crop damage and their sowing area was also reduced this year. Telengana now has reported crop damage as well. AP too has reported some crop damage. But regardless this year's trading seems to be dependent on AP & TLG states fairly. Even at this moment we are still hopeful of good crop but it will all depend on next coming days.

With the given situation, our price estimation is still that the chillies (Teja in particular) will start between Rs.100 to  Rs.120 for the first month of the season. Ideal time to purchase quality chillies will be Feb & March. As stockists will likely enter soon, rates will possibly go high after March.

01.

Crop Area

Sowing area in ANDHRA PRADESH (AP) constitutes about 1,32,000 Hectares. By the end of Kharif season, about 122,000 Hectares i.e. 93% of sowing was complete. During RABI season, 23,000 Hectares of sowing is expected. As of this week, 3000 Hectares of sowing is complete that constitutes about 14% of overall sowing.
Sowing area in TELANGANA (TLG) is about 73,000 Hectares. By end of Kharif season, about 52,000 Hectares i.e. 70% of sowing was complete. During RABI season, 14,000 Hectares of sowing is expected. As of this week, 2000 Hectares of sowing is complete that constitutes about 15% of overall sowing. Sowing in MP has reached 100%. Sowing in KTK is around 80-90% (appx range).

NOTE: Data collected after surveying multiple villages and reports from multiple sources indicate that by late Nov there has been an increase in crop sowing in both TLG & AP states. Reports from Govt sources suggest otherwise, but we  are fairly confident that chilli crop arrivals will be more than what we saw last year.

02.

Rainfall & Water Availability

Rainfall and water levels are adequate. Rainfall has reached 'Normal' expected levels i.e. around 100% (with + or - 10% deviation) in all the four states including the relatively dry areas in TLG, AP & KTK.


TLG Reservoirs Water Level: It's reported that there is 77% (368 TMC) increase in water level from last year. Last year it was 479 TMC, this year it's come around 847 TMC which is sufficient by good amount.

AP Reservoirs Water Level: It's reported that there is 70.3% (550.6 TMC) increase in water level from last year. Last year it was 783.4 TMC, this year it's come around 1334 TMC which is sufficient by good amount. Only Nellore has is deficit in rainfall.

03.

New Crop Arrivals

MP - New crop arrivals have increased in Bedia, Dhamnod, Indore, Kukshi & Jagdalpur markets. Bedia and Dhamnod reporting around 70000 to 80000 bags already with overall MP new crop arrivals reaching upto 1 Lakh Bags. At the moment, arrivals is rain touch material but good quality is increasing gradually. Good quality arrivals are expected to start in and around Dec 2nd week.  

AP & TLG - We are already seeing new arrivals in both the states particularly in Guntur (from Kurnool, Yemiganur, Prakasham areas) & Hyderabad (from Kurnool, Gadwal areas) Markets. Both these markets have reported about 10 to 12 thousand bags of new arrivals each. New arrivals have just started in the Warangal and Khammam areas (~100 to 1000 bags in a week). Arrivals are expected to grow in a couple of weeks.

KTK - New crop arrivals have incresed to 5000 to 6000 bags weekly but we will have to wait until January ending for consistent deliveries of 5531 & 2043 varieties. KDL KADDI & DABBI arrivals will start in the last week of Feb.

04.

Crop Production & Damage

Damage: Some areas in MP have reported virus but the area is less than 7% which is not a significant loss to the overall crop production. About 50% of the new arrivals his week were damaged (effect of last month's rains).
- Prakasham in AP has reported sucking pests, fruit borers, collar rots. About 21,500 Hectares out of the total about 26000 Hectares (83.5% of area) was treated for these viruses. Though there is no crop loss reported.   
- TLG: We were also notified about the possible crop damage (dead branches, flowers falling off, stunted fruit growth) in TLG region. This was even reported in local news papers. But from our recent crop surveys in TLG this region we have seen very good crop. This issue is limited to a couple of Warangal rural regions that are in and around Warangal Urban area. The overall % loss is minimal and shouldnt affect the crop production by much variation.

KTK & MP reports Crop Loss & Damage: Due to heavy rains there is atleast 25% to 45% crop loss in Karnataka. Estimated production in KTK will be about 90% to 100% of arrivals in 2019. MP has reported loss as well, initial arrivals will most certainly be rain touch product. Quality will be weak.

Production: Based on the current situation, even though there is reported crop damage in KTK & MP, the outlook for chilli crop next year is still positive and we will still see good crop next year.

05.

Current Stock Position in Cold Storages

News from trusted sources suggest the following:
GUNTUR: 5 to 7 Lakhs Bags. (Low Best qualities mostly).
WARANGAL: 3.5 Lakhs Bags. (appx 1/3rd owned by a few traders for personal usage. Remaining Weak qualities mostly).
KHAMMAM: 1.7 Lakhs Bags.
BYADGI: 1 to 1.5 Lakhs Bags. (Weak qualities mostly).

06.

Pricing Sentiment & Market Stability

As notified in the last report, we estimated the prices would go down. As of now, we are witnessing good sun and steady arrivals are increasing in MP and new arrivals will start to flow gradually in other locations as well. This is likely going to bring down the rates or atleast steady them for a week or so.

Currently there isnt good demand in the market. So these factors would factor in to estimate that prices would slowly go down in the next coming days.


Factors to watch out for:

Weather conditions - Current climate is conducive for crop production but have to watch out for any changes that would affect the crop.
Stock Availability - Very less, particularly top qualities.
New Arrivals (Quicker than expected) - Due to continuous rains, it was estimated steady and quality arrivals in MP only after Nov 30th. But due to conducive weather in recent days, arrivals have started not only in MP but also in many agri markets including Hyderabad, Byadgi & Guntur. Not many have considered this factor as this is certainly going to help reduce the cost. 
Product Demand - There is still good demand for Export particularly in the APAC region but for quality chillies. 

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The intention here is to provide data so traders, stakeholders can make informed decisions. We put in a lot of effort to deliver accurate information, and though our estimates have been careful, detailed and almost always as expected, please do not take this report at 100% its value. We welcome any suggestions. We do hope this report helps.

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