India's chilli acreage is set to expand during the ongoing kharif season, with stakeholders expecting the area to return to the record levels of 2024-25, according to a June 25 report by The Hindu BusinessLine. The rebound is driven by higher prices for key varieties and lower carry-forward stocks, which have revived farmer interest after last year's reduction due to a bumper crop.
Price Surge and Carry-Forward Stocks
Prices of export varieties such as Teja and Armoor have increased by around 30% year-on-year, while domestic varieties 334 and Super 10, widely used by households, have gained about 20%, according to Velagapudi Sambasiva Rao, President of the Chilli Exporters Association, Guntur. In contrast, powder varieties DD and 341, largely used by spice processing companies, are down about 20% as powder manufacturers have yet to begin fresh procurement due to weak sales during the rainy season. Rao noted that powder purchases are likely to step up from August.
Lower carry-forward stocks are also supporting prices. Rao estimated current carry-forward stocks at around 1.46 crore bags of 40 kg each, significantly lower than the 2.29 crore bags held during the corresponding period last year.
| Variety | Price Change (YoY) | Remarks |
|---|---|---|
| Teja (export) | +30% | Export variety |
| Armoor (export) | +30% | Export variety |
| 334 (domestic) | +20% | Household use |
| Super 10 (domestic) | +20% | Household use |
| DD (powder) | -20% | Weak procurement from processors |
| 341 (powder) | -20% | Weak procurement from processors |
Acreage Expectations and Seed Sales
Rao stated that farmers in key producing states such as Andhra Pradesh, Telangana, Karnataka and Madhya Pradesh are seen increasing the area under chilli. He does not expect any impact of El Niño on the chilli crop, as it can be grown under relatively dry conditions. "With prices ruling firm, farmers are expected to expand acreage across all major growing States in the South as well as Madhya Pradesh. We expect acreage this year to be similar to that of 2024, when chilli was grown over a record area," Rao said.
Sachin Nandwana, Co-founder of agritech platform BigHaat, expects chilli acreage to increase by around 30% this year, based on trends in seed sales on the platform. He reported that sales of chilli seeds have risen by 10-12% for some leading brands, with demand largely emanating from southern states. While erratic rainfall and the delayed monsoon remain concerns, demand for chilli seeds is expected to rise further with the onset of rains. Sowing is likely to continue till the end of August, he said.
Regional Focus: Karnataka and Delayed Rains
Basavaraj Hampali, trader and Founder of SpicExtra, Hubballi, observed that farmers in North Karnataka are also showing greater interest in chilli cultivation this season. Rains in the Dharwad region, where the high-colour, low-pungency Byadgi variety is predominantly grown, have been delayed by around 15 days. "Delayed rains usually prompt farmers to choose either cotton or chilli. This year, more farmers appear to be opting for chilli because of better prices, and seed sales are reportedly strong," Hampali said. Strong seed demand is also keeping prices of Byadgi chillies firm at ₹600-700 per kg for varieties such as KDL and Dabbi. Hampali added that while the new crop was expected to arrive by November, delayed rains are likely to push arrivals to December.
Outlook
The combination of firm prices, reduced carry-forward stocks, and strong seed demand points to a significant acreage expansion for the 2026-27 season. Market participants will watch monsoon progress, especially in key growing regions, and the timing of new crop arrivals, which may shift to December. The price differential between export/domestic varieties and powder varieties highlights the segmented demand dynamics, with spice processors expected to resume procurement from August.
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