Bengaluru: India is the biggest producer, consumer and exporter of dried red chillies in the world.
The main markets of dried red chilli stock in India are Guntur market, Warangal market, Byadagi market, Khammam market and Madhya Pradesh market. These local markets play an important role in the export price of the Indian dried red chilli.
In an unexpected turn of events this year, the chilli market has witnessed an unprecedented surge in demand, leading to a significant storage crunch in cold storage facilities in Byadagi in Haveri district.
The soaring demand has left farmers grappling with the challenge of finding adequate storage space for their produce, forcing many to transport their chilli bags to distant districts of Andhra Pradesh.
This year, despite a slight decrease in the background rate of demand growth, the record demand has outstripped the available storage capacity in cold storage. As a result, farmers are resorting to storing chilli bags and selling them when prices are favourable, given the lack of storage space.
Last year, the Badagi market experienced a chilli shortage, driving up prices and bringing smiles to farmers’ faces. However, this year has seen an increase of 12.86 lakh quintals compared to last year’s storage capacity of 9.90 lakh quintals (2022-23), exacerbating the storage problem.
The previous year’s reduced demand had prompted many farmers and traders to stockpile lakhs of chilli bags in anticipation of higher prices this year. However, the unexpected surge in demand has resulted in a natural price drop, making it challenging to sell the existing stock at favourable rates.
The absence of government-owned cold storage facilities has added to the farmers’ woes, leaving them at the mercy of privately-owned facilities. With over 33 privately owned cold storages in the region, the majority are controlled by business interests. These facilities are already nearing their storage capacities, with more than 30 lakh bags already stocked.
Yamanappa Police Patil, a farmer from Shahpura, lamented the situation, saying, “We can’t store chillies in cold storages due to low prices and lack of space. There’s a fear of spoilage if kept outside, forcing us to sell at whatever price we get, even at a loss.”
The situation has raised questions about the government’s role in providing adequate storage facilities to protect farmers’ crops. Despite receiving crores in subsidies for the construction of cold storage, the government’s failure to allocate land for these facilities has left farmers feeling neglected.
Furthermore, concerns have been raised about whether the increased prices are artificially inflated to create scarcity or to facilitate profiteering.
The current situation underscores the urgent need for the government to address the storage crisis and support farmers in managing their produce effectively.
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