1. RED CHILLIES
Introduction
Chilli (botanically known as Capsicum annuum L.; Capsicum frutescene L.), also called red
pepper belongs to the genus capsicum, under the solanaceae family. They are believed to have
originated from South America. Chillies are referred to as chillies, chile, hot peppers, bell
peppers, red peppers, pod peppers, cayenne peppers, paprika, pimento, and capsicum in
different parts of the world. However, in general the chillies are the smaller-sized, more pungent
types, while the somewhat larger, mildly to moderately pungent types are capsicums. The
pungency is due to the active principle `capsicin’ contained in the skin and the septa of the fruit.
Chillies are valued principally for their high pungency and for their colour. Chilli forms an
indispensable culinary spice in several parts of the world. It is also used in beverages and in the
preparation of medicines.
Agronomy:
Climate, soil and Rainfall:
The chilli crop is grown from almost the sea-level up to an altitude of 1,500 -2100 meters in
tropical and subtropical regions, with an annual rainfall of 60-150 cm. Chillies are grown in variety
of soils provided they are well drained, well aerated and rich in organic matter. Black soils that
retain moisture for long periods are suitable for rain fed crop whereas well-drained chalka soils
and sandy loams are good under irrigated condition. Chilli crop is sensitive to cold and frost and it
requires warmer climatic conditions as compared to tomatoes. The crop requires around 4-5
months for complete maturity that is around 120-160 days with an optimum temperature of 20-27
degree Celsius. In India, chillies are now grown in almost all parts. Very high rainfall during its
growth is harmful. When grown in the hot weather or in lower-rainfall tracts, it is cultivated as an
irrigated crop. The winter crop is planted from July to September and the summer crop in
February and March. Whereas these are the two important seasons for its cultivation, a third
crop, known as the mid-season (May-June) crop, is also taken in certain parts of the country. The
chilly plant lasts for one season only. It is plucked 3 to 4 times in the season. The crop becomes
ready for harvesting in about 3.5 months after planting. The picking of ripe fruits continues for
about 2 months and about 6-10 pickings are taken. If there is a demand for green chillies, the first
one or two pickings are taken for this purpose. The summer crop is wholly disposed of as green
chillies. Ripe fruits are picked along with stalks and are heaped indoors for 3 or 4 days for the
partially ripe fruit to develop the proper red colour. They are then dried in the sun for 4 to 5 days,
depending upon weather conditions and are graded for size and colour before marketing.
Harvest Chart
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
INDIA
MOROCCO
SRILANKA
TANZANIA
Uses of Chilli:
The spice has innumerable uses for commercial, nutritional as well as medicinal. It is used for
preparation of oleoresin that has great export potential and demand in the world market. Chillies
are excellent source of Vitamin, A, B, C and E with minerals like molybdenum, manganese,

2. folate, potassium, thiamin, and copper. In addition, medically used as pain killer, Antibiotic as well
as included in Ayurvedic medicines. The medicinal properties in chillies help to combat various
disease like cancer, heart attack and Lung diseases.
World Scenario
Apart from India, South Africa (South Africa, Malawi and Zimbabwe), China, Pakistan and Mexico
are other major producing and exporting countries. These are mostly low or medium pungency
varieties like Indian S4 chillies, Tiensin Chinese chillies or Pakistan Dandicut chillies. Malawi,
Zimbabwe and Uganda export limited quantities of the highly pungent "East African Birdseye
type, and China exports some high pungency types (Fukien). India faces competition mainly from
China and Pakistan who offer chillies at low prices in international markets.Imports as whole
chillies have fallen in the world market as exports of chilli powder and oleoresin have grown.
There are a number of factories in India, Pakistan and China set up in collaboration with
multinational spice companies, which are now able to produce chilli powder to meet EC and
ASTA hygiene standards. Among the European Union countries, UK is by far the most important
importer of chillies, reflecting its colonial heritage and large ethinic community, with the
Netherlands the second largest importer. The world demand is expected to go up, consequently
there expected to be a great scope for export of chillies. Demand is growing for value added
products using chillies such as chilli paste, curry powders and other sauces for the convenience
food industry. Some of these are produced at origin but stringent hygiene and quality control level
must be maintained. In the extraction industry, there is always demand for high capsaicin content
(over1%) chillies, as this offers extractors a direct saving on unit costs of extraction. The best
opportunities for new suppliers lie in production of selected varieties of high capcaisin chillies for
the extraction market, and in supplying niche retail markets for selected high colour high
pungency whole chillies.
Indian Scenario
Production
India is the world’s largest producer, consumer and exporter of chillies in the world. India also has
the largest area under chillies in the world. Chillies are the most common spice cultivated in India.
It is grown nearly in all parts of the country, hills and plains. Chilli production is spread throughout
the length and breadth of the country, with almost all the states producing this crop. It can also be
grown during the entire year at one or the other part of 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. The market remains active till
May. The major producers are Andhra Pradesh, Karnataka, MP, Orissa, Maharashtra and Tamil
Nadu. Andhra Pradesh alone commands around 53.27% of the chilli production in India. The
major chilly growing districts of Andhra Pradesh are Guntur, Warangal, Khammam, Krishna and
Prakasham. Chilli has well established spot markets. Guntur, Warangal, Khammam in Andhra
Pradesh; Raichur, Bellary in Karnataka are the major spot markets at the production centers. As
per the latest statistics, India produced 1009481 tons of dry chilli during the year 2005-06.
Production Shares of Major Chilli Producing States
AREA PRODUCTION
State Area (Ha) %Share Production (MT) %Share
Andhra Pradesh 171450 25.15 537710 53.27
Gujarat 31650 4.64 37840 3.75
Karnataka 69880 10.25 94500 9.36
Madhya Pradesh 46660 6.85 42480 4.21

3. Maharashtra 99300 14.57 51214 5.07
Orissa 75120 11.02 63290 6.27
Punjab 9882 1.45 15888 1.57
Rajasthan 17720 2.60 17530 1.74
Tamilnadu 49033 7.19 31830 3.15
West Bengal 51957 7.62 60727 6.02
Utter Pradesh 17340 2.54 16119 1.60
Assam 14690 2.16 9490 0.94
Others 26930 3.95 30863 3.06
Total : 681612 100 1009481 100
India’s Production of Chillies
Year Area (hectares) Production (tons)
1999-00 977530 1056000
2000-01 884040 1046220
2001-02 881290 1113090
2002-03 827930 849250
2003-04 794080 1273860
2004-05 771240 1237781
2005-06 681612 1009481
Source: Spices Board, India (latest available as of Feb 2008)
Guntur is Asia’s largest market for chillies. The marketing season begins in the first week of
March and peaks during the month of April, and closes by the middle of May. Around 35-40% of
the crop that arrives here is estimated to be stored in the cold storages present at Guntur and
surrounding areas. Normally, about 80 lakh to one crore bags of chillies (each bags carries
approximately 35 to 50 kgs) is traded during the season in Guntur market alone. The market
players estimate that trade worth nearly Rs 500 crores takes place in Guntur during season.
Besides the highly popular Guntur Sannam (S-4) variety, other hybrid varieties like Wonder Hot,
Ankur, Namdhari, and Indam 5 are traded in this particular market. It is estimated that there are a
100 odd exporters in this market. It is estimated that around 25-30% of the chilly crop is used for
powder preparation, with the branded chilly powder manufacturers accounting for around 5% of
the total volume.
Imports and Exports
India’s chilly exports are on a positive note currently and chilli exports ranks first as compared to
other spices. The exports of chillies has increased significantly from 2003-04 onwards. However,
the country imports very small quantity of chilli. India exports chillies in the form of dried chillies,
chilly powder, picked chillies and chilly oleoresins. Indian chili is mainly exported to USA, Sri
Lanka, Bangladesh, the Middle East and the Far East. The highly pungent "Sannam" & the mildly
pungent 'mundu' chilies are internationally popular varieties. India also offers 'gospurea chlli'.
Chillies are exported as whole, with or without stalks & with clipped stalks and fresh and dried
capsicum and as powder, oils and oleoresins. Byadgi chilli grown in Dharwad district of Karnataka
and Tomato chillies of Warangal, Andhra Pradesh are demanded for their high colour value.
India’s Chilli Exports

4. Year Quantity (tons) Value (Rs cr)
1999-00 63,591 254.72
2000-01 62,448 229.73
2001-02 69,998 252.44
2002-03 81,022 315.15
2003-04 86,575 366.88
2004-05 138,073 499.01
2005-06 113,174 403.01
2006-07 148,500 807.75
India’s Chillies Imports
Year Quantity (MT) Value (Rs cr)
1999-2000 618 4.97
2000-01 449 4.69
2001-02 1,114 4.31
2002-03 1,638 10.25
2003-04 2,138 12.24
2004-05 680 3.02
2005-06 935 4.50
Trade Characteristics
• Well-established spot markets at Guntur, Warangal, Khammam in Andhra Pradesh;
Raichur, Bellary in Karnataka are the major price reference points, as these are based at
the production centers.
• The trade channel involves several members viz., a village level trader, commission
agent, wholesaler, retailer, agents for exporters and exporters. The commodity changes
hands several times, exposing all these members to price risk.
• Guntur is Asia's largest market for chillies. Normally, about 80 lakh to one crore bags of
chillies, weighing approximately 35 to 50 kgs is traded during the season at Guntur
market alone. The marketing season begins in the first week of February, peaks during
the month of April, and closes by the middle of May.
• The market players estimate that trade worth nearly Rs 500 crores takes place in Guntur
during season. During the peak arrival period around 0.8 - 1 lakh bags of 35-50 kg is
traded here daily.
• Around 35-40% of the crop that arrives at Guntur, is estimated to be stored in the cold
storages present at Guntur and surrounding areas.
Market Influencing Factors
• 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.

5. • The prices of the major chilly 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.
Warehouses & Locations
NCDEX/NCMSL accredited warehouses are available at locations like
Pls. visit http://www.ncdex.com/downloads/WH_List_10012006.doc for latest NCDEX list of
accredited warehouse at different locations
MCX accredited warehouses are available at locations like:
Pls. visit http://www.nbhcindia.com/Designated_Warehouses.pdf for latest list of
MCX list of accredited warehouse at different locations
DELIVERY CENTERS:
NCDEX:
Main Delivery Centre: Guntur (up to the radius of 50 kms from the municipal limits)
Additional Delivery Centre: Warangal (up to the radius of 50 Kms from the municipal limits)
MCX:
Main delivery centres: Guntur
Contract Specifications:
NCDEX:
Chilli (Paala) traded as LCA 334 Medium Best ex
Basis
warehouse Guntur inclusive of all taxes
Basis Price Ex-Guntur exclusive of all taxes
Unit of Trading 5 MT
Quotation/Base Value Rs Per Quintal
Tick size Re.1.00
Delivery Unit 9 MT with tolerance limit of 500kg
MCX:
Basis LC334 Chilly New Crop
Basis Price Ex-Guntur exclusive of all taxes

6. Unit of Trading 3 MT
Quotation/Base Value Rs Per Quintal
Tick size Re.1.00
Delivery Unit 9 MT with tolerance limit of 500kg
Appendices:
Varieties
The varieties under cultivation differ in the size, shape, colour and pungency of the fruits. The
fruits may be thin and long large and thick, short and bell-shaped, small and round. The unripe
fruits may be green, creamy, yellow or orange. Similarly, the ripe fruits may be of different shades
of red. They variety with bell-shaped fruits is the least pungent and is cooked as an ordinary
vegetable. Capsicum annum and G. frutescens are the two principle species grown in India and
the varieties of the former constitute the chief source of the dry chilli of commercial use. The
world and India as a nation boasts of a bewildering variety of chillies. The major varieties of India
are Birds Eye Chilli (Dhani), Byadagi (Kaddi), Ellachipur (Sannam S4 Type), Guntur Sannam S4
Type, Hindur S7, Jwala, Kanthari White, Kashmir Chilli etc. Sannam S 4 variety is most popular
variety, with its annual production estimated to be around 3 lakh tons a year. It is also the major
variety that is exported.
Utilization and Demand
All chillies contain a pungent principle made up of capsaicinoids. Dry chillies (or pungent
capsicums) are widely used throughout the world to add pungency to food. Chilli oleoresin is used
in the food processing and pharmaceutical industry. Fresh chillies are also an important export
item but they are considered a vegetable not a spice. Chilli has two important commercial
qualities. If some varieties are famous for red colour because of the pigment casanthin, others
are known for biting pungency attributed by capsaicin. India is the only country rich in many
varieties with different quality factors. There is wide range of products based on whole or ground
chilli entering world trade. The terminology for these products can be confusing, and definitions
can vary between and even within markets. Chillies are used in whole dried or chopped form or
as a ground powder. Chilli paste and chilli sauce are also frequently sold. Oil and oleoresin is the
most important value added product of chillies. The key parameters for any dried chilli products
are pungency level (measured in % capsaicin or Scoville Units) and color (measured in ASTA
color units). In addition, size and appearance may be important. Producers should be sure that
they understand exactly what the market requires.