Dry Chilies Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Dry Chilies Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The dry chilies market is expected to register a CAGR of 5.5% during the forecast period (2022-2027)

The COVID-19 outbreak has directly and negatively impacted the dry chilies market globally. The value addition activities were affected negatively due to the disrupted distribution channels, leading to lower production of chilies in the market. India is the major producer and exporter of dry chilies. However, the country could not export the product to the rest of the world due to lockdowns and supply chain disruptions. The delays in collection and shipment resulted in lower supplies than average, further hampering the overall chilies market.

Asia-Pacific dominates the market, as India is the world’s leading producer of dry chilies, accounting for more than 35.0% in 2019, followed by Thailand, Ethiopia, China, and Pakistan. In recent years, the production of dry chilies in Asian countries has decreased slightly or remained more or less stable. Based on data from FAO (Food and Agriculture Organization), the production of dry chilies in China remained stable over the last four years. In contrast, in Thailand, India, and Pakistan, production decreased. However, the dry chilies market in the Asia-Pacific region is anticipated to grow during the forecast period, owing to the rising demand for dry chilies worldwide.

Some of the major factors driving the market include the increasing demand for dry chilies in western regions like Europe. Europe is one of the largest importers of dry chilies globally as the production in the region is not self-sufficient. Europe produces less than 80 thousand metric ton of dried chilies and other dried paprika, accounting for half of the imports. Therefore, it is highly dependent on the Asian countries for imports. The Asia-Pacific region is also anticipated to achieve a faster growth rate over the forecast period.

India is the world’s largest producer and exporter of dry chilies. India's top importers are Vietnam, Thailand, Sri Lanka, and Indonesia. Andhra Pradeshis the primary producer of chilies in the country, followed by Karnataka, Rajasthan, and Gujarat. Chilies are grown for various uses, including vegetables, spices, condiments, sauces, and pickles.

Among other major producers, India is the world's top producer and consumer of chili. It accounts for 36% of global production and continues to lead in international trade, exporting approximately 30% of its overall output. The demand for the world-famous Sannam S4 dry red chilies is very high worldwide. It is grown in the states of Andhra Pradesh, Rajasthan, Maharashtra, Assam, and Madhya Pradesh. Sannam S4 or 334 contains aroma and spice that is often used for Indian, Chinese, European, Thai, and Italian cuisines.

Based on data from FAOSTAT, the production of dry chilies in the country witnessed a decreasing trend in recent years. In 2017, the production was reported at 2,096,000 metric ton, which declined to 1,702,000 metric ton in 2020. However, as the demand from the west is increasing rapidly, the dry chilies market in India is expected to grow during the forecast period.

The high demand for exotic and spicy oriental cuisines in Europe is driving the market for dry chilies in the region. Europe is the second-largest importer of dried chilies globally, after Asia, accounting for around 40.0% share of the total world’s imports. European imports of dried chilies increased every year by volume. 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 chilies 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 chilies with medium spice, as European consumers do not prefer extremely hot chilies. Hence, there is a huge demand for dry chilies in the region.

Crushed and ground chilies account for 65% of all imported dried chilies, with whole dried chilies accounting for 35%. Spain is the largest importer of dried chilies in Europe. In 2021, Spanish imports of pepper totaled USD 173.1 million. There is high demand for dry chilies in Germany, as they are the country’s third most popular imported spice category after black pepper and ginger. Therefore, Europe is one of the most dominant regions in the dry chilies market due to the increasing demand.

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