The global market for bell peppers is very varied at the moment, depending on the location. In Northern Europe the market has been quiet, particularly in Germany, whilst growers in the Netherlands and Belgium have been battling losses due to cultivation issues, a situation worsened by low prices. In Poland, however, both demand and prices are on the rise, causing some growers to run out of stock. Meanwhile, in the south of the continent the situation is slightly better for most, with a recovery in prices in Italy and satisfying prices for growers in Spain, who have shifted more towards the cultivation of California peppers this year. Prices are also high on the North American continent, perhaps even too high, as they are affecting commitments made around lower prices and higher availability.

The Netherlands & Belgium: Cultivation issues and low prices characterise markets
Compared to other greenhouse vegetables, the price of bell peppers is lagging behind this year. It is a difficult season, whereas the expectation was that it would be a reasonable season.

Growers across the Netherlands and Belgium have to deal with aphid problems and some growers also have problems in the root zone. The cause of this is still unclear. There are growers who have had to interrupt their cultivation due to the cultivation problems. A switch to another crop during the season has also been made.

A glance at the prices shows that the pepper prices have been below the five-year average in recent weeks. Only last week did this change and the price rose above the five-year average. A price recovery that is in line with the last two years, when the pepper price peaked in week 33, only to fall back somewhat.

Yellow peppers were the best paid at the Flemish auctions in recent weeks, besides orange, often lower in volume but higher in price. Red peppers have been below the price levels of yellow for several weeks. For green peppers, the Dutch clock showed an upward trend at the beginning of this week, in line with a price peak last year.

The recent summer holiday weeks have been warm and sunny. Nevertheless, energy prices are being closely watched. The price of gas, for example, has risen above 200 euros per megawatt hour and electricity prices have also reached record heights. It is expected that growers, especially those who have not secured gas contracts at lower prices, may choose to stop their cultivation earlier. Also, if something does not change soon in the energy prices (and that is not expected), growers will plant later, grow more energy-efficient crops and thus come into production later next season.

In the midst of all the extraordinary crisis developments, there was one positive development for exporters of peppers to North America last month. The euro-dollar exchange rate is at such a level that exports to North America are currently more favourable than has been the case for a long time. Also, the air freight costs are said to have decreased considerably. However, the volumes going to North America are small. Many bell peppers remain closer to home, with Germany as a major foreign market. Here, the Dutch product is dominant on wholesale markets, supplemented by Belgian product.

We will have to wait and see when the first imported peppers will hit the shelves again. In addition to a look at the energy prices, we will therefore also look at the mainly Spanish market.

Germany: Quiet bell pepper market
Bell peppers of Dutch origin dominated this season, while Belgian ones supplemented the market. Only limited quantities came from Turkey, Polish bell peppers rounded off the range of goods with very small quantities; domestic bell peppers cost up to € 4.30 per kg in southern Germany. Overall, sales were relatively quiet during the last few weeks.

In general, the demand could be satisfied without difficulties. The prices of all varieties also showed an upward trend. The yellow varieties were generally the most expensive, while the red ones were often still moderately priced.

Poland: Increase in demand for bell peppers
The demand for bell peppers this week is huge compared to the rest of the season, both domestically and in export. This has led to prices for bell peppers increasing, however both consumers and growers seem to be satisfied with the current situation. There are still good quantities available overall, however some exporters saw such a large increase in demand, that they have completely sold out this week.

France: Low production, slow market
The market for bell peppers in France is quite complicated because of a lack of production. This lack is due to the heat, which has also had significant effects on a lot of other vegetables. Due to this lack of product, growers were expecting a high demand compared to the supply, but this is not the case. The market is slow due to a lack of consumption. 

Italy: Bell pepper prices recovering
The bell pepper market in Italy is experiencing a price recovery. For the time being, on a national scale, the markets are absorbing Italian produce, although there is a 10% presence of Dutch peppers.

A wholesaler from a major agri-food centre in the north of Italy says that after a few weeks of an unreceptive market, there has been a recovery in demand from 16 August onwards. Long peppers, yellow or red, grown in Italy and processed in single-layer crates, reached 2.60 €/kg with an average of 2.30 €/kg. There were, however, lower quotations for peppers from the Netherlands: both yellow and red peppers were sold wholesale at around 1.80 €/kg.

A special mention goes to "friggitelli" (these are green peppers that are not spicy, but tend to be sweet. It is also known as the Golden Greek pepper, Sweet Italian pepper, or Tuscan pepper), typical peppers grown in the south of Italy, but sold throughout the whole country: prices are between 2.00 and 2.50€/kg.

In Campania, demand is good and exceeds supply. Compared to the same period last year, prices were clearly higher.

Spain: California bell peppers increasing in popularity
The bell pepper season is now in its last phase in Murcia, where prices have been acceptable for the growers, above 1,00€ per kilo. The season is ending around 2-3 weeks earlier in Murcia due to the prohibition by the Spanish Ministry of Agriculture of 1,3-Dichloropropene, commonly used to disinfect the soil. In replacement to this treatment, growers use the bio-solarisation method, which forces them to end the season earlier and have enough time to treat the soil. Bell peppers growers find this regulation outrageous as it is only applied to their crop while tobacco growers can keep using it. As Almería hasn’t started yet the harvest, there is then a production gap which is making the prices rise, especially for long bell peppers of the Lamuyo variety.

Throughout the whole campaign, prices have been around 10 to 15% higher for the long Lamuyo peppers compared to the shorter California bell peppers, most commonly demanded in the export markets in Central and North Europe. The reason for this is that the acreage of California type peppers has increased around 30% in Murcia, gaining more ground to the Lamuyo kind. Driven by the good demand from Europe and the higher percentages of 1st category units California peppers offer, growers have found it more attractive. Furthermore, seed companies have invested much more in new California bell peppers varieties than in Lamuyo varieties, traditionally consumed in Spain, Italy and Portugal. However, the consumption of California bell peppers in Spain has been increasing since big retailers such as Mercadona, among others, introduced in their shelves tri-coloured pepper packaging, with bigger sizes compared to other European markets. Now, at the end of the Murcian season, the price difference between these two types of bell pepper are huge as the harvest has not started yet in Almeria.

China: High pepper price
Some production areas in China are marked by a shortage of supply which is driving prices on the market up. Prices are up to 3.8 to 4 yuan per jin (0.5 kg), which is almost double the price for green peppers compared to the levels this time last year. The current heat in China also makes harvesting a challenge.

North America: High prices and low availability place pressure on market
The supplies of bell peppers have been good, though some regions are having more challenges than others. For one shipper, the challenge is growing their bell peppers out of Coahuila, Mexico where they have increased their acreage annually in recent years to meet the strong summer demand.

At the same time, however, there are other states producing including Michigan, New Jersey and the Southeastern states such as Georgia and the Carolinas. “In the Southeast, the weather can be a bit of an issue in September. And generally there are a lot of local deals right now that come about during the summertime,” says the shipper. In the West, California is also producing right now. Greenhouse production of bell peppers is also underway.

He does note that most areas domestically have had hot summer months and that’s causing their supplies to be a bit tighter and could also be affecting quality.

“However demand for bell peppers has been good. Bell peppers in general are one of the top five items in the grocery store so from a demand standpoint, there’s always good demand,” he says.

That’s left green bell pepper pricing relatively steady and in the high $20s which the shipper says is not unheard of at this time of year. “But that depends on the weather in the summer--and in the U.S. it’s been erratic--most of your big sizes are pulling $18-$20 right now,” he says.

However red bell peppers have been a $30+ item since the summer started. “With the weather issues and quality issues, that price hasn’t budged--it’s been $34 for months and it’s unheard of to go this long at this price,” he says. “Markets last year versus this year were $10-$12 compared to $34. This hurts your commitments to your customers that you’ve made on a normal type of price and then the availability isn’t there. It’s been a very frustrating and challenging summer so far.” 

Looking ahead, production is anticipated to shift in early November when winter programs begin. “As we start to wind down and get into Late September/October, supply begins to tighten and the shift to Western growing regions begins to take effect,” says the shipper. 

Mexico: Complete certainty about possibility of expanding markets and volumes for Mexican bell pepper
Mexico is by far the largest exporter of peppers on the planet. According to statistics, in 2020 it supplied the different markets around the world with 1,138,288 tons of chillies, hot peppers and (green) peppers, concentrating 28.4% of the total volume of peppers traded in the global market.

The industry of this vegetable has experienced a significant boom in recent years in North America due to the increase in demand from its main client, the United States, and the development of protected agriculture, which has allowed not only a greater efficiency and control of production, but also the possibility of offering a fresh and quality product all the year around; in fact, currently almost 50% of the production in the country is carried out under the modality of protected agriculture. Specifically, according to data shared by the USDA, imports from Mexico represented 77% of the total volume of fresh vegetables imported by the US market in 2020.

Despite its magnitude, the most recent results of the industry show that the pepper sector in Mexico still has an interesting growth margin. In the period from January to November 2021, the value of fresh pepper exports registered a new year-on-year growth of 5.4%, totaling 1,366 million dollars.

“We are completely certain that it is possible to expand markets and volumes. We must bear in mind that, due to proximity, the agro-industrial companies of Mexico always look to the north, which is our natural market, but we are beginning to turn our heads to other places since we are fully aware that there are very good opportunities for marketing our products. products in other markets, since the quality of the Mexican pepper and chili is beyond any doubt,” an important producer and exporter of bell pepper that operates in Jalisco explains.

“Interesting examples are the United Kingdom, which after leaving the EU, is at a good time to open the market due to the difficulties generated by Brexit in trade with the rest of the EU, which was its main supplier of fresh food products; and also more distant markets such as the United Arab Emirates, Qatar, etc… they are markets that we are sure that sooner rather than later, they will be regular destinations for our products”.

However, the United States is set to continue being its main and largest client. The commercial relationship of the Mexican fruit and vegetable sector to the United States is strongly consolidated after decades of close bilateral activity and joint growth, although the industry experienced a bittersweet situation in 2021 when several of its export products were identified and investigated by the USITC for their possible effect on domestic production.

“We are confident that we will not have problems in this matter. Both the United States and Canada have a supply deficit of certain products, such as the case of bell pepper, which is covered by the Mexican producer, and we, as Mexican producers, are subject to regulations through certifications, which guarantee quality. and product safety.

“In all three countries, we work with the same rules and we cover the needs of any country that cannot be covered with its internal production. The sale of our products does not affect our fellow American or Canadian producers, since we cover a demand that they cannot currently cover with their current production."

Next week: Global Market Overview Bananas!

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