Dry Chillies Market - Growth, Trends, Covid-19 Impact, And Forecasts (2021 - 2026)

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COVID-19 has a direct and negative impact on the dry chillies market, globally. The value addition activities were affected negatively due to the disrupted distribution channel leading to lower production of chilly in the market. As India is the major producer and exporter of dry chillies, the country has suffered as they are unable to export the produce to the rest of the world due to the lockdown. The delays in collection and shipment will result in lower supplies than normal, further hampering the overall chilli market.

India is the world's leading producer of dry chillies accounting for more than 35.0% in 2019 of the global dry chillies market followed by Thailand, Ethiopia, China, and Pakistan. There was a slight slump in the global production of dry chillies in 2016 because of the decline in production in the Indian state of Andhra Pradesh, due to virus (pest) attack and lack of irrigation. However, the dry chillies market in the country is expected to grow in the forecast period owing to the growing demand for dry chilles across the globe.

Key Market Trends

India Dominates the Dry Chillies Market ...
... in terms of Production and Exports

India is the world's largest producer as well as exporter of dry chillies. Top importers from India are Vietnam, Thailand, Sri Lanka and Indonesia. There was a slight slump in the global production of dry chillies in 2016 because of decline in production in the Indian state of Andhra Pradesh, due to virus attack and lack of irrigation and also crop failure in the state of Madhya Pradesh, which resulted in enhancement of prices of dry red chillies.

During 2016, Indian farmers preferred to produce cotton over dry chillies as they incurred losses because of the substantial slump in prices. The demand for the world-famous Sannam S4 dry red chillies is very high and this variety is growing all over the world and it is grown in the states of Andhra Pradesh, Rajasthan, Maharashtra, Assam and Madhya Pradesh. Sannam S4 or 334, contains aroma and pungency which is often used for Indian, Chinese, European, Thai and Italian Cuisines. However, as it is a temporary effect, the dry chillies market in the country is expected to grow in the forecast period.

Europe dominates the market

The high demand for exotic and spicy oriental cuisines in Europe is driving the market for dry chillies in the region. Europe is the second-largest importer of dried chillies in the world after Asia accounting for around 40.0% share of the total world's imports. European imports of dried chillies have increased every year in volume in the period between 2014 to 2018. Around two-thirds of imports from outside Europe come from developing countries.

Also, the largest share of the intra-European trade consists of re-exports of dried chillies that originally came from developing countries. In the next five years, imports are likely to increase with an annual growth rate of 5.0-6.0%. The highest growth is expected for dried chillies with medium pungency, as European consumers do not prefer extremely hot chillies. Hence there is a huge demand for dry chillis in the region.

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