The U.S. Paprika/Chilies harvest was extended to the middle of January due to unprecedented rains and freezes during the latter part of harvest season in West Texas and New Mexico. This resulted in high moisture pods and freeze damaged pods being sent to the dehydration plant thereby reducing processing efficiencies.
Longer than normal processing times to reduce moisture has resulted in darker visuals than normal and higher micro levels. The yields held close to plan in many areas, while Northern Mexico regions saw a decrease in yields produced.
Organic Chilies harvest happened earlier than scheduled and finished prior to the Thanksgiving break. With good yields and no major weather events, the processing went well leading to the availability of good quality US grown organic Paprika and Chili Peppers.
China Post Harvest
Despite a much lower crop than 2017 and a limited availability of good quality high color pods, the Chinese Paprika market has been relatively silent. This could be a direct result of lower than normal high color paprika being purchased for Oleoresin extraction, due to a carryover of inventory from last year. Available inventory is high moisture and low ASTA color, which is being used for current processing. A good quantity of the high ASTA color pods have been used for typical whole pod export business into Mexico and the US. Limited quantities of high ASTA pods are with speculators and this product is being secured into cold warehouses to preserve color earlier than normal. Good quality paprika pods are fast depleting, and there is only limited availability.
With limited availability of about 16,000-18,000 MT of paprika for the export market, Peru is focused on whole pod exports into Mexico and the US for the table paprika market. Farmers are expected to see better returns due to limited availability from China. Overall, Peru Paprika prices are higher than the previous year due to limited availability and counter seasonal characteristics in relation to China.
Availability of high visual color paprika and chili pepper in US will be limited in 2019, in addition to the limited overall inventory availability for US Paprika and Chili Peppers. Limited overall availability of Chinese Paprika and limited acreage in Peru may cause the prices to move up as we get into the summer months. Early coverage of requirements is recommended as we do not see any major quantities of fresh raw material entering the market until about the end of 2019.