Market Analysis of Pepper in 2016 and Market Forecast in 2017

Pepper is an important "vegetable basket" product in China, and it is not only a common variety for people to eat three meals a day, but also one of the most important cash crops in China. From the point of view of use, chili peppers are mainly divided into two categories: fresh chili peppers and dried chili peppers. Fresh chili peppers are fresh and perishable, most of which are used for direct consumption and belong to fresh vegetable varieties. The main producing areas of fresh chili peppers are Hainan, Guangdong, Yunnan, Sichuan, Chongqing, Shandong, Henan, Liaoning and other provinces (cities). In summer and autumn, they are mainly planted in open fields and in winter, while dried chili peppers are easy to store and transport. mainly used as processing raw materials, belonging to the series of condiments. Dry pepper planting areas are concentrated in Shandong, Henan, Hebei, Xinjiang, Hunan, Hubei, Sichuan, Chongqing, Guizhou and other provinces (cities, districts). The main mode of production is open field planting. Since the beginning of this year, the price of hot pepper in China has fluctuated greatly, especially the price of dried pepper has fluctuated greatly, which has aroused strong concern from the society. On the whole, in 2016, China's pepper production decreased significantly compared with the same period last year, consumption remained flat and slightly increased, export growth was strong, import volume and amount both decreased, market prices rose overall compared with the same period last year, and price fluctuations increased; in 2017, pepper planting area is expected to increase year-on-year, consumption slightly increased, and export volume increased slightly. If there are no large-scale natural disasters, pepper production is expected to increase compared with the same period last year, and the overall average price level is lower than the same period last year. It is suggested that farmers rationally arrange pepper production and avoid blindly following the trend to expand the planting area.

I. Analysis of the market supply and demand situation in 2016

(1) the main producing areas have been affected by a wide range of disasters, and the output level has dropped significantly.

The supply of hot pepper in China has formed a pattern of "large-scale production and large circulation". In a year, the main producing areas that began to appear on the market shifted from south to north according to latitude (see Table 1). It is estimated that the planting area of chili peppers in 2016 is 23.2 million mu, which is slightly lower than that of last year. With the exception of Liaoning, the main pepper producing areas all suffer from high temperature, rain, flood and other natural disasters to varying degrees, resulting in a great reduction in pepper production. There were many high temperatures in early July, which affected dry pepper pollination in main producing areas such as Henan and Hebei. Heavy rainfall in August caused waterlogging in Henan, Sichuan, Hunan, Shandong and other planting areas. Typhoon weather in October also caused serious disasters in Hainan and other pepper producing areas. Repeated disasters within a year have led to a large area reduction in production in the main producing areas. In 2016, the per unit yield of pepper was estimated at 1350 kg per mu, down 9.9% from the same period last year; and the total output was 31.33 million tons, down 10.4% from the same period last year.

(2) the custom of eating spicy food has spread widely, and the consumption of chili peppers has increased slightly.

Since the introduction of hot pepper in the late Ming and early Qing Dynasty, the domestic hot food area has been expanding, the hot food population has expanded rapidly, and the consumption of hot pepper has become increasingly popular. At present, China has become a major consumer of chili peppers in the world, with a total population of more than 500 million, accounting for about 40% of the domestic population. Domestic pepper consumption is expected to be 29.9 million tons in 2016, a slight increase compared with last year. From the point of view of the demand structure, the demand for fresh pepper occupies an absolutely dominant position, and the consumption of fresh pepper exceeds 90% of the total pepper consumption. the main varieties are persimmon pepper, sweet pepper, pickled pepper, line pepper, sharp pepper, etc.; dried pepper is the main raw material for deep processing, the market demand is on the rise, and the proportion in the total consumption of pepper is increasing, and the main varieties are Chaotian pepper, millet pepper, plate pepper and so on.

(3) the export of chili peppers has grown strongly, and the amount of imports has dropped.

China is a big exporter of chili peppers in the world, and its export volume ranks first in the world. The main export destinations are South Korea, Japan, Mexico, Australia, the United States, Southeast Asia and other countries and regions. The main export products are frozen fresh chili, dried chili, chili powder, chili sauce, canned chili and so on. In the first 11 months of 2016, the volume and value of China's pepper exports were 240000 tons and 466 million US dollars respectively, a sharp increase of 42.0 per cent and 46.8 per cent respectively compared with the same period last year. China's pepper importing country is mainly India, and the variety is S17 high-spicy variety. The import quantity and amount of hot pepper in the first 11 months of 2016 were 2000 tons and 5 million US dollars respectively, down 30.1% and 10.4% respectively from the same period last year.

(4) the price of hot pepper has risen on the whole, and the price fluctuation has increased.

The overall average price of chili peppers rose 11.7% in 2016 compared with 2015, mainly for two reasons: first, there were more natural disasters in 2016, pepper production decreased, resulting in tight market supply, brokers snapped up prices; second, rising production costs pushed up prices. The average production cost of chili peppers increased by 11.2% in 2016 compared with the same period last year, mainly due to the rapid increase in employment costs and land rental costs.

Pepper prices fluctuated greatly in 2016. Take green pepper as an example (see figure 1). The maximum monthly price difference in the green pepper wholesale market is 7.99 yuan per kilogram, higher than 7.19 yuan per kilogram in 2015 and 6.38 yuan per kilogram in 2014. It is worth mentioning that the price fluctuations of dried chili peppers in 2016 are particularly eye-catching, and the "hot" phenomenon has re-emerged. Take Sanying No. 8 fine pepper in Jining City, Shandong Province as an example, the production of pepper has been greatly reduced this year, resulting in a sharp rise in the price of new pepper after it was put on the market at the end of October, soaring by 2 yuan per catty in half a month from November 1 to 15, reaching an all-time high of 7.2 yuan per catty. After November 16, it quickly fell back to 6.8 yuan per catty, and the violent degree of fluctuation is very rare.

II. Expected market trend in 2017

(1) with the increase of planting intention area, the yield of hot pepper is expected to increase.

Affected by the high price of pepper in 2016, the enthusiasm for planting pepper is high, and the area is expected to increase to 23.9 million mu in 2017, an increase of 3.0% over the same period last year. There are two main reasons: first, the market price of chili is good this year, and the intention of farmers to expand seeds next year is widespread; second, the comparative benefit of planting chili is high. It can be seen from Table 2 that farmers' profits from growing chili peppers are significantly higher than those of other crop varieties in the same region.

There are too many abnormal weather in 2016, resulting in low per unit yield of chili peppers. If the weather is normal in 2017, the per unit yield will return to 1404 kg per mu, an increase of 4.0 per cent over the same period last year. It is expected that China's pepper production is expected to reach 33.56 million tons in 2017, an increase of 7.1 percent over the same period last year, driven by the expansion of the area and the increase in yield per unit area.

(2) Market demand has maintained growth, and consumption has increased slightly and steadily.

The domestic consumption demand of hot pepper in China has been increasing for many years, mainly for two reasons: first, the spicy food customs are widely spread, especially Sichuan cuisine, Hunan cuisine, Guizhou cuisine and other spicy cuisines. As a result, the domestic demand for chili peppers and their processed products will maintain the momentum of growth. Second, with the further exploration of the functions of pepper in medical treatment, health care, beauty and other aspects, the demand for deep-processed pepper products continues to grow, which leads to the continuous expansion of the demand for pepper raw materials. Taking various factors into account, pepper consumption is expected to be 31.5 million tons in 2017, an increase of 5.3% over the same period last year.

(3) International demand continues to increase, and the volume of exports increases slightly

Since the beginning of the 21st century, the world pepper trade has shown a trend of rapid development, and the international trade volume of pepper and its products has increased year by year. With the in-depth implementation of the "Belt and Road Initiative" strategy, the trade volume of fresh pepper to China in the international market, especially in neighboring countries, will further increase. At the same time, there is a large demand gap for pepper red pigment, capsaicin and other pepper deep processing products in the international market. Under the stimulation of international demand, China will further increase the export quantity of pepper deep processing relying on the rich raw material advantage. China's chili exports are expected to increase slightly to 320000 tons in 2017, an increase of 15.0% over the same period last year.

(4) the average price may fall from the same period last year and fluctuate in the "V" shape during the year.

It is expected that the overall average price of chili peppers will decline in 2017. First of all, according to the previous analysis, if there is no frequent abnormal weather, pepper production in 2017 will exceed consumption, and there will be a market situation in which supply exceeds demand; secondly, the price of pepper will rise significantly in 2016, and farmers will cherish the situation of selling. brokers hoarded to rise, resulting in a significant increase in dry pepper stocks at the end of 2016 compared with 2015, increasing pepper supply in 2017, thus increasing the overall average price downward pressure compared with the same period last year.

In terms of price trends within the year, pepper prices in 2017 will continue to fluctuate in the "V" shape in previous years. As can be seen from figure 1, the price of chili peppers, driven by consumer demand during the Spring Festival holiday, reaches its highest point within a year around February every year, and then begins to decline as the listing volume increases, reaching its lowest point around August, and then rises again, gradually climbing to the highest point during the Spring Festival next year.

III. Suggestions on production and operation

First, farmers need to arrange pepper production rationally. Pepper prices rose in 2016 compared with the same period last year, boosting farmers' enthusiasm to expand pepper planting in 2017. However, according to the forecast, the trend of supply exceeding demand in China's pepper market in 2017 is obvious, and the overall average price may decline compared with the same period last year. It is suggested that farmers rationally arrange their planting plans for 2017, do not blindly follow the trend to increase pepper production, and prevent the loss of income caused by falling prices.

Second, farmers need to strengthen pest prevention and control work. In recent years, pepper diseases and insect pests occurred frequently in China, which caused serious losses to farmers. Pepper growers should take measures such as selection of disease-resistant varieties, seed disinfection and pesticide application to strengthen the prevention and control of pepper diseases such as blight, virus, anthracnose, gray mold, bacterial leaf spot and so on. At the same time, biological control, physical control, chemical control and other measures should be taken to strengthen the killing of pepper cotton bollworm, aphids, whitefly, Liriomyza huidobrensis and other pests.

Third, farmers need to adopt a sustainable planting model. Pepper production needs regular rotation and application of organic fertilizer in order to maintain high yield and good quality, otherwise it will gradually deteriorate. The survey found that in some places (such as Zigong City of Sichuan Province and Baoding City of Hebei Province), due to long-term cultivation of chili peppers and over-reliance on chemical fertilizer to promote production, resulting in a decrease in yield and quality grade compared with the same period last year. It is suggested that farmers should rotate crops regularly and increase the application rate of organic fertilizer to ensure the sustained and healthy development of the local pepper industry.