Caixin
Mar 06, 2020 01:53 PM
ECONOMY

Chinese Hunger Fuels Rise in Chili Pepper Prices

A man spreads red chili peppers to dry in Zhangye, Gansu province. Photo: Nikkei Asian Revew
A man spreads red chili peppers to dry in Zhangye, Gansu province. Photo: Nikkei Asian Revew

By Sachiha Kurose

(Nikkei Asian Review) — China’s insatiable appetite for chili peppers has made the spice an even hotter commodity.

In Japan, import prices for dried Chinese chili peppers have jumped 13% over a year, government data shows. And export prices from China have climbed 9%, according to a trading house.

“As living standards rise with income, demand for chili peppers has grown throughout the mainland,” a trading company representative said.

The burgeoning popularity of spicy Sichuan and Hunan cuisine has driven consumption up. Demand has mushroomed to the point that China is importing chili peppers from India.

Japan, which produces only a few percent of the chili peppers it consumes, imports an annual 12,000 tons to 15,000 tons of dried chili peppers a year. Roughly 90% of this comes from China.

January import prices for dried Chinese chili peppers reached 484 yen ($4.50) per kilogram, Japanese trade statistics show — up more than 70% from a decade earlier.

In China, export prices for chili peppers have trended higher for the past five years or so.

The quarterly average export price for China was $2,200 per ton in November 2019, according to a trading house, up 18% from two years earlier. Extra-spicy varieties popular in Japan fetch up to $5,000 a ton.

Inclement weather has contributed to the supply crunch. Chili peppers are produced mainly in Sichuan, Guizhou and six other Chinese provinces. They are normally harvested and sun-dried between October and November.

But last year’s harvest period suffered around seven days of rain, hurting supplies. “The water soaked the chili peppers, causing mold,” a processing company representative said.

Chinese farmers are also hording inventories to raise prices further, according to a spice supplier.

China produced 320,000 tons of chili peppers in 2018, according to data from the United Nations’ Food and Agriculture Organization. It was second to India, which produced 1.8 million tons and commands a 40% global share.

Although China imports from India, “the crackdowns on smuggling and circuitous shipping routes have intensified,” a trading company source said. The stepped-up enforcement has made Chinese supply even tighter.

The coronavirus outbreak in China has not significantly disrupted chili pepper supplies in Japan.

“There are cases where shipments were delayed, but no perceived product shortage has emerged in the Japanese market due to existing inventories,” a trading company representative said.

This story was originally published by the Nikkei Asian Review

Contact editor Yang Ge (geyang@caixin.com)

loadingImg
Register to read this article for free.
Register
Share this article
Open WeChat and scan the QR code