India is the world's largest producer, consumer and exporter of chilies in the world. India also has the largest area under chilies in the world. Chilies are the most common spice cultivated in India. It is estimated that India produced 1060345 tons of dry chili from an area of 8, 84,183 hectares in 2003-04.
Chilies are valued principally for their high pungency and color. Almost all the states of India produce the crop. The Indian Chilli growing states are Andhra Pradesh (46%), Karnataka (15%), Maharashtra, Madhya Pradesh, Orissa, West Bengal, Rajasthan and Tamil Nadu. Indian Chilli can be grown during the entire year at one or the other partof the country. However, the major arrival season extends from February to April.
The crop planting starts from August and extends till October. While, the harvesting begins from December with 5% of the arrivals usually reported in this month. The peak arrivals are reported in February to March. There are several varieties of Indian Chilli and the most popular among these are Sannam, 334, 273, Byadgi, Wonder Hot, Mundu, Teja, Yellow Chilies & Tomato Chilies
India is the largest consumer of Chilli in the world. Around 90% of India's production is consumed within the country. India exports around 80000 – 100000 tons of chilies a year. India exports chilies in the form of dried chilies, Chilli powder, picked chilies and Chilli oleoresin. Indian Chilli is mainly exported to USA, Sri Lanka, Bangladesh, the Middle East and the Far East.
Factors Influencing Chilli Markets
1)The commodity displays high volatility, with the prices heavily dependent on season, production in different producing tracts spread across the country, demand from exporters and the stock available at the cold storages.
2)The prices of the major chilli varieties sold in the country are correlated with each other. As a result, the players in other varieties can also hedge their risks through this single variety.