The Byadagi red chilli market is facing a severe crisis as prices have drastically dropped, putting traders at risk of a substantial loss. With around 10 lakh bags of last season’s stock still unsold in cold storage, the loss is estimated at nearly Rs 400 crore. Many vendors, who had purchased chillies at high prices expecting profitable returns, are now struggling due to market downturns.

Muttu Reddy, a farmer from Nallaguntla village in Andhra Pradesh who sells his produce at the Byadagi market, shared his concern: "Last year, the average price was Rs 55,000 per quintal, but this year, the highest price is only Rs 28,000."

The price crash can be traced back to last year’s market dynamics, where steady demand led many vendors and spice companies to buy and store large quantities of chillies in cold storage, anticipating higher profits. Some farmers also followed suit, storing their produce in the hopes of better returns.

However, this overstocking has caused the number of buyers at open-market bidding to drop from 300 to just 150 this season. Major spice companies, including MDH and Achi, have also shown reduced interest in purchasing fresh stock.