What set Byadagi chilli market on fire in Karnataka

The Byadagi chilli market in Central Karnataka, known for the Geographical Indication (GI) tagged chilli variety grown in the region, is in the news for the wrong reasons after farmers went on a rampage in the APMC market yard on Monday following a crash in prices of the spices crop.

Also read: IIHR develops multiple disease-resistant chilli varieties

The market witnessed high arrivals of around 3.1 lakh bags of 30 kgs each on Monday, considered normal during the peak marketing season of February-March-April. The crash in prices of some hybrids, where “quality” was an issue, triggered protests by a section of farmers who ransacked the APMC office and torched vehicles in the market premises.

Quality matters

Byadagi chilli prices have been on a bearish trend this year. As per Agmarknet data, the modal price (the rate at which most trades take place) for the Dabbi or the thicker variety of Byadgi chilli, which touched a seasonal high of ₹44,000 per quintal on December 22, 2023 – the start of the 2023-24 chilli marketing season, has come down  ₹35,000 levels as of March 5. Similarly, the Kaddi or the thinner variety of Byadagi chilli, which ruled at  ₹43,000 levels have now eased to around  ₹31,500 levels. In the Byadagi market, where the Guntur type of chillies known for their pungency are also traded, the modal price eased from a high of  ₹16,065 to  ₹12,429 a quintal.

Sources said the original Byadgi Kaddi and Dabbi varieties, which are preferred by the spices companies for their low pungency and high colour content are still ruling between ₹25,000 and  ₹30,000 levels, while the hybrids are currently ruling between  ₹12,000 and  ₹15,000 levels, depending on the quality of the produce.

Most of the produce that’s coming into the market now is not of “top quality” and is from the second and third pickings, sources said. The prevailing prices are realistic chilli prices and should not be compared to last year’s prices, which were unusual and exceeded the  ₹50,000 per quintal-mark as the production shrunk due to various factors such as excess rains and higher incidence of pest attacks, sources said.

Swayed by last year’s prices

Spices firms, oleoresin makers, exporters and buyers from the HORECA (hotel, restaurant and catering) segment are still active in the market, but prices are linked to the quality of the produce arriving at the market yards, sources said. Moreover, an estimated 25-30 lakh bags of Byadgi chilli from the last year’s crop is still lying in cold storages, which is also weighing on prices.

As the Byadagi market sets the benchmark for chilli prices, growers from neighbouring Andhra Pradesh, Telangana and, also, from far away states such as Gujarat also bring their produce here, sources said.

Buoyed by last year’s prices, growers have expanded the acreages this year in the non-traditional growing regions and irrigated tracts. Growers said the cost of cultivation has gone up as chilli production is input-intensive. In addition to rising labour costs, crop inputs have turned expensive and growers, braving all odds including drought, have gone out to all extent to save their crops this year. Growers said the crop size is good this year, but the market is not supportive.

Red chilli, being a cash crop does not come under the ambit of a minimum support price. Karnataka had over 1.06 lakh hectares under red chilli cultivation during 2022-23 and the production was over 1.67 lakh tonnes. Bulk of the red chillies produced in Karnataka are of the Byadgi variety and its hybrids.

Also read: Chilli rebounds on crop concerns, demand from exporters and stockists

After Monday’s commotion, the tendering exercise was carried out in the Byadagi market on Tuesday, where prices saw a marginal increase of  ₹5-10 per kg. With a sizeable crop yet to arrive into the markets in the days ahead, stakeholders including the administrative machinery and the trade held a meeting on Tuesday and the focus going ahead is on how to handle market arrivals.

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