Likely Decline in Red Chili Oleoresin Production

27-Mar-2026 06:03 PM

Guntur: Domestic production of red chili oleoresin is expected to decline this year due to a confluence of factors. According to industry and trade analysts, a 20–25 percent drop in red chili production is anticipated, a situation that has already driven prices upward and led to a sharp surge in rates.

Conversely, increased production and rising inventory levels in China have caused the export offer prices for Chinese oleoresin to fall to a highly competitive level. Consequently, there are apprehensions that India's exports in this sector may weaken.

The Indian spice industry is now shifting its focus toward boosting the production and export of turmeric oleoresin—rather than red chili oleoresin—as global market demand for 'natural curcumin' remains robust. It is worth noting that spice oils and oleoresins are manufactured through the extraction of various whole spices, and the export demand for these products typically remains strong.

The Chairman of the All India Spices Exporters Forum states that red chili extraction is currently proceeding at a reduced pace; this is primarily because, firstly, raw material prices are high, and secondly, existing carryover stocks of oleoresin are already sufficient. Manufacturers are expected to prioritize the liquidation of these existing stocks before undertaking fresh production.

Compared to last year, red chili prices are currently hovering at nearly double the previous levels. Indications point toward a significant decline in red chili production, driven by a reduction in the total area under cultivation across major producing states—including Andhra Pradesh, Telangana, and Karnataka—as well as weather conditions that have not been entirely favorable.