India, the leading producer, consumer, and exporter of dried red chillies globally, faces a storage crisis as demand unexpectedly surges this year. The key markets for dried red chillies in India, including Guntur, Warangal, Byadagi, Khammam, and Madhya Pradesh, play a vital role in determining export prices.
In a twist of events, the chilli market experiences an unprecedented surge in demand, causing a significant storage crunch in cold storage facilities, particularly in Byadagi, Haveri district. Farmers struggle to find adequate storage space for their produce, leading many to transport chilli bags to distant districts of Andhra Pradesh.
Despite a slight decrease in the demand growth rate, record demand surpasses available storage capacity in cold storage facilities. Farmers resort to storing chilli bags for future sales due to space constraints.
Last year’s chilli shortage in the Badagi market drove up prices, but this year’s storage capacity of 12.86 lakh quintals exceeds the previous year’s capacity of 9.90 lakh quintals (2022-23), exacerbating the storage problem. The unexpected surge in demand leads to a natural price drop, challenging farmers to sell their existing stock at profitable rates.
Lack of government-owned cold storage facilities compounds farmers’ woes, leaving them reliant on privately-owned facilities, most of which are controlled by business interests. With over 33 privately owned cold storages in the region nearing their capacities, farmers face challenges in storing their produce.
Farmers like Yamanappa Police Patil from Shahpura express frustration over the situation, highlighting the fear of spoilage and the pressure to sell at low prices due to space constraints.
The storage crisis raises concerns about the government’s role in providing adequate storage facilities and addressing the potential artificial inflation of prices to facilitate profiteering. Urgent government intervention is needed to alleviate the storage crisis and support farmers in managing their produce effectively.
