Coronavirus scare leaves Andhra chilli farmers in the red

Despite a good crop, the chilli farmers of the two Telugu states of Andhra Pradesh and Telangana are a worried lot. The Coronavirus scare has hit the chilli exporters from AP, the largest chilli producing state in India.

China, the major importer of red chilli, has now suspended imports since the outbreak of the deadly virus, leaving the Andhra farmers worried.

The chilli prices in the coastal Andhra city of Guntur, the country’s biggest chilli market, have fallen drastically.

“The prices of popular varieties like Teja and Guntur chilli have dipped to between ₹5,000 and ₹6,000 per quintal now. They were commanding a price of ₹9,000 to ₹12,000 per quintal a fortnight ago,” Dasharathrami Reddy, a chilli farmer from the region, said.

In December last year, the prices of Teja variety, which is most preferred by China, had touched between ₹16,000 and ₹20,000 per quintal due to heavy demand from China and Bangladesh.

China accounts for nearly 65% of the total exports from India, amounting to ₹6,000 to ₹7,000 crore annually. Of this, AP and Telangana account for nearly ₹5,000 crore. The two Telugu states together account for more than 60% of India’s total output of nearly 2.30 million tonnes.

Indian chilli is also exported to Singapore, Bangladesh, Sri Lanka, Thailand and the European Union.

“China has suspended the trade as the country is grappling with the outbreak of Coronavirus. We are monitoring the situation and will make appropriate interventions to protect the interests of farmers,” the chairman of Guntur agricultural market committee C Yesurathnam said.

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While Teja variety is considered the highest quality stock because of its high pungency, commanding high price in China, the fall in its price has affected the other low-quality varieties as well.

“A chill farmers should at least get ₹8,000 per quintal so that it is remunerative for them. Anything less than that is a loss. Chilli cultivation is an expensive proposition,” said P Chengal Reddy, an agriculture expert.

There is hope that China will increase the offtake once the situation in the country comes under control.

Unlike last year when chilli production was affected due to adverse weather conditions, there has been a bumper crop this year following copious rains and the sowing area going up by 20%.

Central intervention

Meanwhile, raising the issue in the Rajya Sabha on Thursday (February 6), the Congress member KVP Ramachandra Rao urged the Centre to intervene and take appropriate measures to protect the interests of chilli farmers.

He wanted the government to ensure minimum support price to chilli farmers and initiate procurement operation besides providing storage facility with insurance cover till the situation gets better for exports.

“The suspension of trade by China due to coronavirus disease has unfortunately halted India’s export of chilli. The farmers of Andhra Pradesh and Telangana are badly hit as prices of chilli are declining. They are forced to resort to distress selling,’ Rao said.

He also demanded that Food Corporation of India (FCI) step in to provide cold storage facility for chilli stock till the situation improves.

Worries in the manufacturing sector

The Coronavirus scare has also impacted the manufacturing industry in Telangana. There are fears that the manufacturing units will have to bear the brunt if the situation doesn’t improve over the next few weeks.

The State is home to around 170 industrial parks where, besides the IT industry, many electronic hardware and software manufactures, semiconductor companies and aviation and aerospace engineering industries operate. However, it is the electronic hardware and software industry that relies on China the most.

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“Many of the manufacturing companies source their parts from China,” the State Industries and Information Technology Secretary Jayesh Ranjan said.

With China halting the exports, the companies are beginning to feel the heat.

“The transit time for supplies from China to India is around 40 days. Since everything was shut down on January 15, we will only feel the repercussions around March,” said Ram Baheti, Secretary of the Automotive Park Industries Association.