Hyderabad, TELANGANA — This time last year M Venkateswara Reddy was a busy man, procuring hundreds of thousands of bags of Guntur’s famous red chillies to export to markets across Asia. In good years, nearly half the red chillies consumed in India are sourced from Guntur.

This year Reddy is at home, working the phones as the Secretary of Guntur’s procurement yard to reassure hundreds of farmers and traders alarmed by the impact of the novel coronavirus on their livelihoods.

Guntur’s market yard has been shuttered by India’s coronavirus lockdown and the prices of high-grade chillies have fallen 25 percent. All procurement of chillies has stopped, Reddy said, exports are paralysed and domestic sales have crashed. The loading operations at port at Visakhapatnam have slowed to a crawl, and with migrant farm workers unable to travel across state lines because of the lockdown, much of the chilli crop is yet to be harvested.


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The slump, chilli growers said, began soon after the novel coronavirus began its deadly march across China — a key market for the chillies — and has continued since.

Halfway through India’s 21 day lockdown, the crisis in Guntur’s chilli market offers a snapshot of an economic uncoupling last seen during demonetisation, when Prime Minister Narendra Modi crippled the economy by suddenly declaring high-value currency notes would no longer be legal tender. If the lockdown’s effect on the chilli crop is anything to go by, the disruption caused by the lockdown will take months to amend and, much like demonetisation, marginal farmers and small traders are likely to bear the brunt.


The fate of Guntur’s chilli crop is indicative of countless segments of India’s economy that are rarely noticed by policymakers or commented upon by the national media — but are likely to suffer in the current lockdown. The disruption in the chilli market is likely to ripple through to the region’s pickle producers, and will cause fluctuations in markets for chilli powder, flakes and blended markets.

“Most farmers who have not harvested in January and February are still waiting for labourers for harvest. That is more than half the produce in the state” Dr. A. S Rao, director of research in N G Ranga Agricultural University, Guntur told Huffpost India, adding that scores of labourers from Andhra Pradesh and neighbouring Telangana had migrated back to their states in the last week of March. The domestic farm labourers too have been forced to remain at home due to the curfew.