Approximately 57% of Total Production on Brazilian Pepper Market Is Sent to Export

Spices, Aromatic, Drug And Pharmaceutical Crops July 02, 2018
Author: Anna Sergeeva
Market Analyst

IndexBox has just published a new report "Brazil: Pepper - Market Report. Analysis And Forecast To 2025". Here is a summary of the report’s key findings.

Pepper Market Size in Brazil Increased over the Last Year

Pepper market in Brazil stood at $98M in 2016 in producer prices, a growth of 47% from the prevous year. However, from 2008 to 2015, the market showed a pronounced decline. In physical terms, market volume increased rapidly over the last two years and amounted to 24K tonnes in 2016, after a period of a sharp fall from 2007-2014 (IndexBox estimates). 

Pepper Consumption in Brazil Is Expected to Reach 28K Tonnes by 2025

Pepper demand is created both by end consumers, purchasing the product for their personal food requirements, and the corporate buyers, that use spicy products in their production processes. Meat processing plants can be classed as the main corporate consumers: pepper is added to sausages and many other products. Hotels, restaurants and catering constitute another consumer segment. Generally, the demand will depend on the wealth of the population and population growth – all-in-all, people are end consumers of pepper.

Current upward trend with regard to population growth in Brazil is expected to continue set against the expected gradual recovery of the Brazilian economy from its downfall of 2015-2016; this will drive the demand for pepper. Furthermore, the demand for pepper from meat processing industry is also expected to grow moderately. Driven by these major factors, pepper consumption is to continue its upward trend, expanding at an average annual rate +2.0% per year through to 2016, which is to lead the market volume to the level of 28K tonnes by 2025. However, pepper consumption can be adversely affected by any shortfall in supply caused by low yields. Pepper output increased slightly over the last two years

Production of pepper amounted to 54K tonnes in 2016, growing over the last two years. From 2007 to 2013 it indicated a steady decline, stabilizing only in 2014. It value terms, the decline of production was even more pronounced. It finally dropped to $70M in 2016, declining with a CAGR of -11.3% over the last nine years. From 2015-2016, an increase in the harvested area led to a surge in the output, which was the most noticeable in 2015. The harvested area expanded robustly over the last three years, due to transition of the areas previously used for growing coffee into pepper cultivation. This was сonditioned by a few years of poor yields due to an abnormal drought, as well as increasing prices for pepper worldwide. In 2016, pepper production continued its increase but at a more moderate pace, which was due to reduced yields affected by weather anomalities caused by El Niño. 

Approx. 57% of Total Brazilian Pepper Production Was Sent to Export

A major share of Brazilian pepper output is intended for export. The share of exports in terms of the total output increased from 50% in 2007 to its peak of 81% in 2014, then, however, it fell back to 57% by 2016. By contrast, imports remain negligible against the overall market volume, with the share in total consumption not exceeding 5.5% in physical terms and 3.8% in value terms. Thus, Brazilian pepper market remains independent from import supplies

Brazilian Pepper Exports Waned in 2016 due to Decreasing Supplies to the U.S. Market

Brazil remains one of the largest global exporters of pepper, giving way only to Viet Nam and Indonesia. In 2016, the volume of pepper exports from Brazil totalled 31.1K tonnes, decreasing noticeably against the previous year level. This abrupt decline was caused by a decrease in supplies to the U.S. which where pressured out by supplies from Viet Nam; this was due to toughening global competition amid rising output in Viet Nam and the other major producing countries. Prior to that, exports grew robustly from 2012-2015, recovering after a downfall period from 2007-2011. In value terms, it amounted to $247M in 2016. The value of exports indicated an upward trend from 2007-2015 with a sharp acceleration over the recent years, but then it dropped dramatically in the last year.

In 2016, Germany (9.2K tonnes), the U.S. (7.3K tonnes), Spain (2.6K tonnes), France (2.3K tonnes), Mexico (1.9K tonnes), the Netherlands (1.5K tonnes) and Argentina (1.1K tonnes) were the leading destinations of pepper exports from Brazil, together making up 83% of the total exports. Amongst the major importing countries, France (+4.5% per year) and Mexico (+3.1% per year) gained the highest annual growth rates from 2007 to 2016. By contrast, exports to the U.S. and the Netherlands declined by an average -6.7% and -6.4% per year over the same period. While the share of the U.S. decreased significantly from 35% in 2007 to 23% in 2016, the share of Germany (+7 percentage points), France (+3 percentage points) and Mexico (+2 percentage points) illustrated positive dynamics; the Netherlands also slightly reduced its share by -2 percentage points. The shares of the other countries remained relatively stable throughout the analyzed period. 

Pepper Imports to Brazil Remain Negligible

The volume of pepper imports to Brazil totalled 460 tonnes in 2016, fluctuating somewhat wildly over the period under review. In value terms, it amounted to $3.1M that year. These amounts, however, remained negligible in terms of the market scale. As Brazil boasts strong pepper industry and exports, there is no tangible room for imports on the local market. India (151 tonnes) and Viet Nam (102 tonnes) were the main pepper suppliers to Brazil, followed by Mexico (51 tonne) and China (42 tonnes); all these countries comprised a combined share of 75% of the total imports.

Do you want to know more about the pepper market in Brazil? Get the latest trends and insight from our report. It includes a wide range of statistics on

  • pepper market share
  • pepper prices
  • pepper industry
  • pepper sales
  • pepper import
  • pepper export
  • pepper market forecast
  • pepper price forecast

Source: Brazil: Pepper - Market Report. Analysis And Forecast To 2025