GUNTUR: Chilli farmers across Andhra Pradesh are facing mounting financial distress this harvest season as surging input costs, tight credit availability, and economic uncertainty force them into distress sales. With no access to traditional credit and a sharp rise in cultivation expenses, many are selling their produce immediately after harvest—often at lower prices—departing from the usual strategy of stockpiling for better market rates.
Typically, farmers store part of their yield in cold storage and sell gradually to maximise profits. But this year, liquidity constraints have upended that model. “Earlier, we stored our produce and borrowed against it, but this year, no one is willing to lend,” said Kiran Rao, a chilli farmer from Chebrolu. “We’re left with no choice but to sell everything immediately, even though the prices are low.”
Andhra Pradesh has 1.94 lakh hectares under chilli cultivation, yielding an estimated 11.29 lakh metric tonnes this season, according to official data. However, repeated pest infestations and unseasonal rains have pushed input costs up by over 30% and lowered the overall quality of produce, hurting both domestic and export prospects.
Cold storage operators report that their facilities are running at under 40% capacity. “Farmers are bringing in very small quantities,” said one cold storage owner. “Most are choosing to sell quickly due to lack of working capital. Banks are refusing loans against stored produce, and that’s affecting us too—we’re often guarantors.”
Adding to the pressure, over 30 lakh bags from last year’s harvest reportedly remain unsold, creating a glut and further weakening price prospects. With loan repayments pending and little institutional support, many farmers are unable to access new credit.
Meanwhile, large traders and exporters in Guntur city and surrounding areas are taking advantage of the situation. They are actively purchasing in bulk, betting on price rises later in the year. The Guntur chilli yard—one of Asia’s largest—has been witnessing daily arrivals of 1.3 to 1.4 lakh bags. Despite high supply, prices have remained stable, driven by strong demand for premium varieties.
On April 11, benchmark prices included Teja S17 at Rs 10,000–Rs 13,000 per tikki, 334 Sannam at Rs 8,000–Rs 11,000, Bydagi 5531/668 and 341 at Rs 8,000–Rs 13,000, DD at Rs 9,000–Rs 12,000, and Armoor at Rs 8,000–Rs 10,000.