Chilli futures prices are projected to trade lower on poor demand along with rising arrivals. However, a small recovery can be seen on short covering during the day. Nonetheless, over bearish trend might pull down the prices again on fresh selling in far month contracts.
Domestic bulk buyers are also staying away from market in anticipation of further fall in prices Daily arrivals at spot market of Guntur declined to 40,000-50,000 bags on Thursday (1bag-40Kg.)
Export inquires from Bangladesh and Pakistan are remaining poor
Andhra Rabi chilli area as on February 8th is reported 0.50 lakh ha v/s 0.44 lakh ha yr ago
Chilli production estimates for this season is estimated around 12.5-13 lakh tonnes v/s 10.5- 11 lakh tones last year
According to derivative analysis, prices have declined while volumes and open interest have declined. It indicates that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend.
Chilli NCDEX Feb-12 support: 5058 5151 resistance: 5418 5565 Sell at 5340 TP 5150 SL 5520
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