With China, a key buyer of the Teja variety, showing no demand, the market remains depressed, and any prospects for recovery appear bleak until at least July, given the absence of significant export demand.

China currently holds substantial stocks and is not expected to re-enter the market within the next three months. Interestingly, demand from China was robust earlier in the season, with purchases exceeding 20-25% compared to the previous year.

Bangladesh was the third largest buyer of Indian chillies after China and Thailand during 2022-23, as per the Spices Board data.

Nevertheless, the market is experiencing the impact of reduced demand from Bangladesh. This year, Bangladesh has shifted its preference and begun sourcing from Myanmar, where the crop yield was favorable. Additionally, Myanmar's chilli quality proved superior, coupled with competitive pricing, prompting Bangladesh to abstain from the Indian market.

The oleoresin companies have procured a significant quantity of chillies, effectively fulfilling their nine-month requirement. As a result, they do not intend to make further purchases from the market.

In Karnataka as well, chilli prices persist in their downward trend due to a scarcity of quality arrivals and a dearth of demand. Prices are down by approximately 50% since the beginning of the season, primarily due to the absence of demand as most buyers have already secured their positions.