Farmers hold chilli stocks anticipating price rise

Chilli arrivals have declined considerably as farmers continued to store their last year's produce in cold-storage plants in anticipation of a steep climb in prices.

They are reluctant to offload the old crop at the government agricultural market yard here for auctioning.

As a result, about 18 lakh 'tikkis' (42-45 kg bags) are in cold-storage plants as against the normal backlog of 1-2 lakh 'tikkis' every December. Last month, farmers have so far sold 1,74,444 quintals of chillies as against 2,67,720 quintals in January 2004.

M Sivaramaiah, market yard special secretary, said that farmers unloaded 100-150 'tikkis' (42-45 kg bags) every day during the last week, indicating the beginning of this year's season. However, fresh as well as old stocks earned almost the same price. In the past, he said, traders had paid high prices for cold storage chillies (old crop).

As farmers hurriedly bought huge quantities of fresh crop at the beginning of the season, traders took advantage by offering lower prices. Last year, they paid Rs 2,300-3,000 per quintal for cold storage special chillies, but fixed a paltry Rs 1,000-1,800 per quintal for fresh chillies.

Now, the situation, he said, was different. Farmers earned Rs 1,800-2,900 per quintal on common varieties of cold storage chillies (old crop) and Rs 2,400-3,300 per quintal on special varieties.

Common varieties of fresh chilli crop (this year's) also fetched Rs 2,000-2,900 per quintal and special varieties Rs 2,500-3,000 per quintal.

He said this season would be very profitable for farmers. Chilli crop acreage in Andhra Pradesh had come down by 30 per cent. Besides, the two cyclones damaged the crop in some districts, hitting crop yields.

According to reports, chilli crop estimates are also discouraging all over the country. These developments have put traders on alert, who keep a vigil on the yard to lap up their chilli consignments as quickly as possible by offering good prices.

Yard statistics reveal that farmers had earned a maximum price ranging between Rs 3,600 and Rs 4,500 from October-December and January 2006 as against Rs 3,300-3,250 in the same months during 2004-05, showing a definite upward trend.

In 2004-05, 43,43,753 quintals of chillies hit the yard and in 2005-06 with two months still to go, only 28,19,498 quintals were sold. With 18 lakh tikkis locked in cold storages, and with final estimation of this season's crop yet to come out, farmers hope that the chilli prices would soon shoot up and that they could offset their losses.