Increasing rabi season acreage in AP with poor export and domestic demand might also keep prices under pressure.
However, short covering at lower level can not be over ruled during the day. Andhra Rabi chilli area is reported 0.29 lakh ha as on 23rd Nov. v/s 0.24 lakh ha yr ago. Due to increase in acreage traders are expecting higher production in next season.
According to Spices Board data, chilli exports during April- Sep, 2010-11 were down by 35% as compared to the same period last year.
According to derivative analysis, prices and volumes have declined while open interest has increased. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Chilli NCDEX Dec-11 support: 6926 6947 resistance: 7003 7032