HAVERI: Chilli prices have nose-dived in Byadagi red chilli market, triggering concern among vendors.
With approximately 10 lakh bags of last season's inventory remaining unsold in cold storage, traders are staring at a loss of nearly Rs 400 crore. Vendors who had purchased chilli at premium rates, anticipating profitable returns, are now having to confront strong market headwinds.
"The average quality had sold for Rs 55,000 per quintal last year, but this year, Rs 28,000 is the maximum that our produce has fetched," said Muttu Reddy, a farmer from Nallaguntla village in Andhra Pradesh, who sells his produce here.
Sources said the current situation has a lot to do with market dynamics of the previous year when a steady demand encouraged most vendors and spice companies to purchase and store chilli in large quantities in cold storage in anticipation of higher profits. Some farmers had also stored their produce, buoyed by the same reason.
This has brought the number of buyers in open-market bidding down from 300 to 150 this year. Major spice companies such as MDH and Achi have also shown only lukewarm interest in making fresh purchases this season.
Shivanand Mallanagoudra, an agent at Byadagi chilli market, said: "We are staring at a loss of approximately Rs 400 crore."
Shailaja MV, joint director of Byadagi market, said: "We hope farmers will get a better price in the next two months of this season."
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