Market Report: Chilli & Pepper
As we continue to deep dive into the world of Heat that is sweeping through the food and beverage innovation scene, we want to take a quick moment to look at what is driving the market of these two pillar ingredients - Chilli & Pepper.
India produces more than two million metric tonnes of chilli a year, and we saw the arrival of the second round of harvested crops in early March. This influx of chilli has helped to stabilise the market, and we are thankfully seeing a higher crop output compared to last year.
The 2025 black pepper crop is projected to be the lowest in years due to shortfalls in Vietnam, Brazil, and India. In Vietnam, the largest producer harvest was delayed by 1.5–2 months, due to drought beginning only in mid-February. This has reduced both quality and yield, further restricting supply and driving up prices. India’s crop is also expected to decline by 25–30%.
Late harvests led to a surge in prices in early February, with peak harvesting now expected in late March, to early April. Rising demand from the EU and Asia, supply restrictions by farmers, and labour shortages have contributed to price volatility.
After spiking post-Lunar New Year, prices have eased slightly. A strong US dollar has made Vietnamese pepper more affordable for buyers. Meanwhile market speculators also bought up stock in the early harvest to stockpile early in the season, further supporting the sharp price rise in mid February.
Supply is expected to keep declining in 2025 as farmers shift to more profitable crops like coffee. Prices are likely to remain high, with demand from the EU and Asia steady and US and Chinese imports expected to pick up.
In order to stay ahead of these market shortages, make sure to contact your Account Manager today to start forward planning, or email us at info@nftc.com.au.