Chilli seen weak on likely rise in supply

Chilli prices on the National Commodity and Derivatives Exchange and in the spot market were expected to fall in the week ahead as arrivals were expected to rise, traders and analysts said on Tuesday.

On Tuesday, chilli futures on NCDEX were down by over 3 per cent after hitting the first lower price limit of 2 per cent in early trade.

Spot prices were also down by Rs 1-2 a kg on Tuesday because of higher arrivals and weak domestic demand, Ashok Jain, a Guntur-based trader said.

Spot prices
Chilli prices are likely to witness a downward movement of Rs 2-3 a kg in the coming few days amid higher supply and sluggish local demand, Jain said.

On Tuesday, prices at Guntur market in Andhra Pradesh were in the range of Rs 30-35 a kg, traders said. Arrivals were around 100,000 bags (1 bag=40-45 kg), up from a daily average of 70,000-80,000 bags last week, they said.

Also, weak domestic demand and lack of better export prospects may weigh on prices, a local trader said.

Futures trend
Futures are seen weak in the next few days taking cues from spot market and on technical selling, analysts said.

"We may see some technical selling, after the surge in prices in the previous week," a Mumbai-based analyst said.

Last week, prices moved up on speculators' buying and low stock of good quality chilli in spot market.