Transcription
Red chili prices have become hot this year. This is despite lower export demand. Namaste.
Prices of normal chili varieties are ruling at an average of rupees 200 a kilo. Premium varieties such as Byadagi and KDL are ruling at rupees 620 and 550 a kilo respectively. A drop in production has turned chili hot.
To provide us with more details on chili, we have Mr. Basavaraj Hampali, founder of Spices Extra. His family owns Hampali Traders in Hubli, Karnataka. It has been in red chili trade for years together. Welcome to Business Line's Trending Commodity Picks, Mr. Basavaraj Hampali.
How has chili production been this year? What's the reason for this output?
So, as you know, Karnataka is one of the major dry chili growing area of in India. Uh it's mainly famous for uh the Byadgi chili, which is known for its color value. Uh this year, as you can see in the graph, uh the arrivals are almost 40% lower than the last 2 years. Uh this is what we can see in the production. So, production production is lower by 40 plus percentage. So, production is lower this year.
How have the arrivals been? What's the reason for this?
Uh I think I will just take you uh some 2 3 years before. So, in year 22 23, uh prices went very high. Uh for that reason, uh in the coming 2 years, farmer increased the area drastically. Uh with the increase in area, uh the market suddenly crashed. Uh the prices crashed suddenly. And what happened was uh farmer were left out uh left with their old previous year stocks. So, that's why this year in uh 25 26 year, what farmers they do was they decrease the area uh by very big margin. So, I can give you numbers also. In Karnataka, normally sowing area is uh for dry chilies in between 3 to 3.5 lakh acres. This year, if you see, it's around 2 lakh acres. So, there's a uh reduction of 40 to 45% in the area also. So, this is the main uh reason why we are getting lower produce this year. Farmer have uh drastically reduced dry chili. They had gone for mainly pulses and uh corn also. As you know, last year, government had said good MSP rate for corn. So, farmers had shifted to that crops.
How are prices ruling this year?
So, when we want to say prices also uh Subramani Ji, uh last year was very uh devastation for farmer. Prices were very very low. I think I we can say like uh in last 5 years, last year was the lowest price for farmers. So, this was another reason which made farmers uh to reduce the area in last year means 2025 26 year crop.
How are exports? Why has it been affected?
Sir, when we say exports, one thing was sure itself when we were starting with this season. Last year like 24 25 year, if you see the numbers also, they were record-breaking exports. I think countries importing countries bought procured more than what they were required. So, that's the reason which we we are seeing slow slower exports this year. Mainly bigger buyer countries like China and Bangladesh are very very slow this year. China especially last year procured very in a high quantity. So, that's why expectation for exports were slow this year and it's they are slow till today also.
How will the sowing of chili be in 2026 2027? What are the factors?
It is bound to increase in the coming year. That is 26 27 in year 26 27, it is bound to increase the area because last year was lowest dry chili area in Karnataka from last 8 years data. So, this was one of the lowest sowing year for dry chili. So, it it is bound to increase and another reason are prices, right? This year, chili prices were very very high in especially in Karnataka. Farmer have never seen this kind of a prices over long period. So, there was a big consistency, right? Normally, I think previous best was in 2023 24 year. When we had a farmer had got very huge price, but it was in a very small short span. Maybe in month of March, he had got. But here, what happened was from starting from January itself till today, he's getting very very high prices. And another reason is farmer in Karnataka have not got good prices on any other commodity. Let it be pulses. Uh whether he has not able to get good prices. Corn, as you know, it's very very lower. Uh only other commodity other than dry chili which performed relatively well was cotton. So, this is why we are saying like area will increase by a good margin. And also, uh as as we speak on, this year cold storage this year not much of stock has gone to cold storage. So, this year, there will be continuous demand uh till the end of the season. So, this will motivate the farmer to increase his area. And when you are talking about the factors, so which will affect the area increases or decreases, these are small signs. So, as you know, Hubli is one of the strong area for dry chili growing in Karnataka. So, if there are early monsoon, uh this will help the farmers uh to go to other crops also like something like moon or other crops. Uh but uh if farmers are not able to see early monsoon, uh if monsoons are little later, then at Hubli area, he is only left with dry chili or cotton. So, this is one reason uh factor we have to uh check into. And another is like uh if government provides any higher MSP for pulses, corn, this might have an impact. And also, cotton uh whatever we are getting from the sources, uh area more might not reduce. It might increase in Karnataka area. So, these are the uh things uh which we have to see by how much margin the area will increase. But by for sure, area will be increasing. But by how how much margin, we have to see. Karnataka normally has about 3 to 3.5 lakh acres. So, last year it was something around 2 lakh acres of sowing. So, this year, we have to see by how much it will be uh farmer will be doing sowing.
Thank you very much for your valuable insights, Mr. Hampali. We hope our viewers have benefited from them. Thank you all for tuning in, viewers. Keep smiling and be happy until we meet in our next episode. This is Subramani Man Gombu signing off. Good luck.