Data shows that the price of peppers in Chinese production areas began to rise in October 2018, especially around Chinese Spring Festival [February 5th, 2019]. The price suddenly shot up. The price of Lantern peppers increased by 4.5 yuan [0.67 USD] per 0.5 kg since January last year. That is a growth of 69.23%. Compared to the 6 yuan [0.89 USD] per 0.5 kg in March last year the price increased by 83.33%.
Quite a few farmers profited from the sudden price increase, and they naturally decided to increase the surface area devoted to pepper plantation. Data from consultation companies shows that the overall surface area devoted to pepper plantation in China expanded by 20%. The overall surface area exceeded 267 thousand hectares in 2019, which is around 20% more than the overall surface area of 224 thousand hectares in 2018.
People in the industry say that the current pepper market is shaped by extreme weather conditions in pepper production areas last summer. The overall production volume decreased by 30% last year as a result of extreme weather conditions. Furthermore, China annually imports 100 thousand tons of peppers from India to supplement domestic supply, but the import volume also declined this year.
People in the industry point to reduced supply volume as the main reason for high prices, but market speculation further exacerbates the situation.
Source: Workers' Daily