The price of Chinese pepper surged earlier this season. The price doubled in comparison with last year because of extreme weather conditions during the last production season. Recently, however, as temperatures are climbing, the price of pepper in production areas began to slide. The market price is expected to adjust in the short term. At the same time, farmers are likely to rapidly expand the surface area devoted to pepper production because the pepper price is high this year.
The high pepper price is mainly the result of extreme weather conditions during the last production season. Production areas in Henan suffered from extreme weather conditions at the end of last year and the production volume turned out less than ideal. Furthermore, production areas throughout China suffered from rain and snow after February, as well as an unexpected "cold snap during spring". Production areas suffered in varying degrees, but the overall production volume dropped by more than 30%.
Zhao Gongying, data analyst at Zhuochuang Information, explained that the price will further decline as the temperature continues to rise. Furthermore, this is the season when glasshouse peppers from Shandong and Hebei enter the market in large volumes. Therefore, when supply begins to exceed demand, the price will come down even further.
As the temperature continues to rise, open-field peppers will also enter the market in large volumes. The cost-price of open-field peppers is much lower. The retail price will consequently drop. The price of peppers still has a long way down to go.
Source: toutiao.com