Moreover, there are reports that traders are still at loggerheads with the government following the fire outbreak in June that caused damage exceeding Rs 200 crore.
The arrival of chilli in the market, predominantly coming from cold storages, is pegged around 40,000 bags of 40 kg each. There are reportedly 50 lakh bags in the cold storages of Andhra Pradesh at this point of time.
The August chilli contracts on the National Commodity and Derivatives Exchange declined in the first three trading sessions last week, touching a low of Rs 5,173 a quintal.
However, the momentum picked up in the subsequent sessions. The futures finally ended the week at Rs 5,225 a quintal against the previous week's close of Rs 5,302, down 1.45 per cent.
The August chilli contracts have a support at Rs 5,100 a quintal and resistance at Rs 5,300-5,350 a quintal, according to commodity analysts.
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