Chilli spot, futures to head north

Chilli spot prices in Guntur, Andhra Pradesh, are seen firm in the week ahead anticipating a rise in exports following reports of lower crop prospects due to floods in China and Pakistan, traders and analysts said today.

On the National Commodity and Derivatives Exchange, near-month September prices are likely to remain high on speculative buying and low exchange warehouse stocks.

However, the October contract is not expected to rise sharply as arrivals are set to start trickling in next month and will cap any major rise, analysts said. Guntur chilli spot prices are likely to remain firm in the range of Rs 4,000-4,500 per 100 kg this week on expectations of export demand from China, traders said.

Also, chilli prices are expected to trade higher due to floods in chilli growing areas in Pakistan and the consequent demand for Indian crop, an India Infoline report said.

According to analysts, China's chilli crop is seen down 20-25 per cent and Pakistan crop is also likely to be lower following floods in both countries.

However, no export orders have actually materialised and so traders are still willing to cash in on the existing demand from Bangladesh, Naresh Sharma, a Guntur-based trader said. Guntur spot arrivals are expected to stay steady between 30,000 and 35,000 bags a day.