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Chili: China causing a stir

November 1, 2016 at 12:20 PM , Der AUDITOR
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HONGKONG. Elation and confidence are determining the current market situation for chili. There are, however, serious concerns.

Are Chinese traders letting themselves be dazzled, or is the price development based on facts?  

Demand stimulates elation
The domestic demand in China is boosting prices yet again. Prices for chili and chili derivatives have increased for the second quarter in a row. Traders in China are especially eager to buy due to the high demand on the mainland.

All of it just a sham?
Last week, an increase of Indian cultivation areas up to 15% compared with last year was reported, and availability remains a given. Despite these facts, traders agreed yet again to the price increase. Markets in India and China show a rather mixed development, and it is hard to tell if the market is reacting to truly founded factors, or if elation is the driving force. The FOB price for chili derivatives was at 1,450 USD/mt in October, as opposed to 1,350 USD/mt in September 2016.

 

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