Chilli spot plummets by Rs 400

Red chilli today hit the lower circuit across all the sections in futures trade on the National Commodity & Derivatives Exchange on the back of inordinately high arrivals in mandis.

The hot variety plunged by Rs 400 a quintal in the spot market. Moreover, the price decline also witnessed in the futures market was a reflection of the huge slump in spot prices.

"Chilli prices are set to fall further. They may touch a low of Rs 3,500 a quintal in a week, from the Rs 4,300 level now, because of bumper crop all around," Mumbai-based trader Ashok Dattani said.

The country's total chilli production for this season was estimated at 2.2 crore bags (40-45 kg each). But traders now say the output may go up slightly. And this, according to them, may push down the market into a further bearish trend.

Even at these lower price levels, buyers are keeping away from the market. Traders, however, are expecting good export demand this year.

"We have started quoting our prices for future shipments now. This is in response to the enquiries that poured in to us sometime ago. We are confident that we would be able to grab good export orders this year," Dattani said.

At present, Guntur is seeing a daily arrival of around 20,000 bags, and this is expected to touch a peak of 1 lakh bags by the end of this month.

Quality-wise, the crop hitting the markets currently is better than what had been supplied till last month.