India is the largest producer, consumer and exporter of chilli, which contributes to about 40% of total world production. Next to India, China is the major producer of chilli in the world. In India, chillies are grown in almost all the states. Andhra Pradesh is the largest producer of chilli in India contributing to about 44 % to the total production, followed by Karnataka (12%), West Bengal (8%), Madhya Pradesh (7%), Maharashtra (4%) and Tamil Nadu (2%). According to traders survey, in the current year, the area under chilli has reduced in Tamil Nadu, Andhra Pradesh and Karnataka and the production is likely to fall by 40 per cent comparing last year. Further in Maharastra and Madhya Pradesh also the production has declined. The season in Maharastra and Madhya Pradesh has ended in February. The export target of chilli from India during 2012-13 was 2.40 lakh tonnes. About 10-15% of total domestic production is meant for exports with domestic consumption of 85-90%. India exports chilli in various processed forms like chilli powder, dried chillies, chilly pickles, chilli paste, flaked chilli, etc., and it is mainly exported to Sri Lanka, USA, Nepal, Mexico, Malaysia, Bangladesh, UAE, Indonesia and China. During 2011-12, Tamil Nadu produced 30298 tonnes of chillies from 58603 hectares. Tamil Nadu produces 58 per cent of the chillies under rainfed condition. Ramanathapuram (samba), Thoothukudi (mundu), Sivagangai (samba), Virudhunagar (samba), Tirunelveli (samba) and Sankarankovil (samba and mundu) are the major producers of chillies in the State. In Tamil Nadu, during October-November chillies are raised in nursery or directly sown and harvested during March. Peak arrivals flow during April,May. Chillies produced in Tamil Nadu will hit markets in Kovilpatti, Sathur, Sankarankoil, Rajapalayam, Kamuthi, Muthukulathur and Virudhunagar markets from second fortnight of March. It is preferable to store dried chilli in cold storage to retain colour. Last year farmers received Rs.40-45 per kg and compared to last year the price of red chillies increased this year.Farmers are interested to know whether the prices will increase in the coming months or remain stagnant. To help them, the Domestic and Export Market Intelligence Cell functioning in Centre for Agricultural and Rural Development Studies, Tamil Nadu Agricultural University, Coimbatore analysed the price of red chillies. The results showed that farmers could get a price of Rs.62-65 per Kg during April –May 2013. Currently the exports orders are very limited. If fresh orders are received for export purpose, then the prices are likely to increase. Since prices are not likely to increase in the near future, farmers are recommended to sell red chillies without going for storage.