Red Chili Prices Rising

The image shows a red chili pepper lying on a dark background. The chili is cut near the bottom, and the cut section is surrounded by a small pile of crushed chili powder and seeds. The word "Majestic Spice" is visible in small text near the bottom of the image.
13Aug

Red Chili Prices Rising

As of August 2024, the red chili market has seen a lot of ups and downs. This is primarily driven by a mix of higher export demand, problems with the supply chain, and pricing issues within India. These factors have collectively led to a notable surge in red chili prices, impacting both domestic and international markets.

Export Demand : Export Demand: India’s red chili exports have grown by 15% in both volume and value during the 2023-24 fiscal year. This growth is mostly due to increased demand from countries like China and Bangladesh. As a result, the prices of Indian red chilies have risen sharply on the international market, which has also pushed up prices within India.

Supply Chain Disruptions: Key chili-growing areas in India have seen fewer chilies arriving at markets than expected. This shortage has been worsened by a 5% GST on dried red chilies, making pricing even more complicated. As a result, the prices of Indian red chilies have risen sharply on the international market, which has also pushed up prices within India.

Domestic Market Discrepancies: Within India, there have been significant differences between the listed prices for red chillies and the actual amounts farmers receive. This has led to protests, particularly in Telangana, where farmers have expressed frustration over receiving lower prices despite official listings indicating higher values. The unrest has prompted calls for government intervention to ensure fair pricing.

Price Trends: The combined effect of these factors has resulted in a marked increase in red chili prices across various markets. Popular varieties such as Teja and Byadgi have seen price hikes of over 50% compared to the previous year. With demand expected to remain strong and supply challenges ongoing, further price increases are likely in the coming months.

References:

Farmers in Telangana protest over Rs 10-4K/quintal red chili price disparity. (2024, January 9). The New Indian Express. Retrieved from https://www.newindianexpress.com

India’s spices exports hit a record $4.46 billion in FY24, red chili up by 15%. (2024). Zee Business. Retrieved from https://www.zeebiz.com

Red Chilli Market Report. (2024, August). Mundus Agri. Retrieved from https://www.mundus-agri.eu

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