Chilli futures on the National Commodity and Derivatives Exchange are likely to remain firm on technical factors and buying by speculators on lack of clear cues from Guntur spot market, analysts said. | |
| Chilli spot prices are likely to remain steady, but trade volume may be weak because of Sankranti and Pongal festivals. |
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| Spot markets are likely to witness thin trade as most traders are away on account of the festivals, said Jugraj, a Guntur-based trader. |
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| The Guntur market is officially closed until Wednesday, and trading is likely to be lacklustre on Thursday and Friday, traders said. |
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| Last two weeks, spot prices have remained fairly steady around Rs 32-37 per 1 kg and arrivals are also likely to remain steady at 35,000-40,000 bags. Major buyers of chilli in Guntur market have been domestic traders from North India besides local demand from Andhra Pradesh with a small quantity being exported to Bangladesh and Malaysia. |
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| Indore spot chilli prices are likely to remain steady at Rs 35-37 per 1 kg but down from Rs 35-38 last week, traders said. |
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| Analysts feel there is a growing disconnect between technical factors and fundamentals in Guntur chilli, which has been compounded by the closure of the market from Mon-Wed. Lack of cues from the spot market since Monday has led to extreme volatility in prices, and the February contract has surged over 4 per cent in just two sessions. |
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| Technically, prices are likely to remain firm but the expected rise in arrivals due to higher crop estimates may keep them in check. |
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| The February contract is likely to rise and face resistance at Rs 4,050 per 100 kg with strong support at Rs 3,730, said Nalini Rao, research analyst, Angel Commodities. |
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| Chilli traders are also hoping that a potential surge in exports due to lack of supply from other producers will also boost prices in the coming week. |
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| However, Rao feels the upside is limited and when new crop arrivals hit the market by end-January or during the first week of February, prices should head lower. |
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| At 1.28 pm, the February contract was at Rs 3,880 per 100 kg, up Rs 48, or 1.25 per cent, from Monday's close. |
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