China y Estados Unidos - OLAM PDF

5/14/2013
Capsicum Market Report China & US Vinay Sreekumar

May 16, 2013
Creating value is our business
Important Species
Family : Solanaceae Genus : Capsicum
Species
Characteristics
Distribution
Capsicum frutescens High Pungency. Low flavor Tabasco, Most Indian Varieties Low to Medium Pungency, Some Paprika as well as Indian good color Color chillies. Popular in U.S Capsicum annum Habenero,Jamaican Hot, etc. Not common in India. Capsicum chinense Extremely Hot, Fiery Not very common. Little is Small regions in S.America Capsicum pubescens known Not grown in Asia, Mostly grown Capsicum baccatum Medium-High pungency in S.America.
usually, higher the pungency, lower the color.
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Major Products: Products: Color, Heat and Flavor

Paprika - Color Primary Origins: China, Peru, US Secondary: Spain, Israel, Zimbabwe
Specialties Flavor Jalapeno, Chipotle, Ancho, Guajillo, Green Chile & others Origins: Mexico, Peru
Capsicums 20-27 species 100(0)s varieties
Mild Medium Hot Red Pepper Primary Origins India, China
Hot Red Pepper Primary Origins India, Pakistan, Bangladesh Secondary: Mexico, Africa
Standard Pod Size
- generally, smaller the pod size, higher the pungency.

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2012/ 13 Market Overview Capsicums

Overall Global Production of Paprika is UP
Chinese Paprika Production is UP Good US crop Peru trending low to previous years
Continued Strong Demand

Higher than normal growth rate in destination markets Whole Pods, Oleoresin Strong demand Specialties on the rise.
Market Pricing trend is Lower
2012 Global Production - Paprika 432MM lbs ( 196,000 MT)

MM lbs
2% 3% 12% 7%
China Peru 15% 61% US Europe Africa Others
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2012 Paprika End Usage by Type

1% 17%
49% Ground Oleo 33% Whole Others
2012 Global Demand by Region ( 190,000 MT)

MM lbs
5% 9%
40% 17% US + Canada Europe China Mexico Others 29%
5/14/2013
China Key Market Characteristics

Second largest Capsicum producer in the world. Largest Paprika producer High 2012 crop of ~120,000 MT Large crop of Medium quality ( 160 200 ASTA) High level of transformation Whole to Crushed/Ground: VAT impact High favorability among Spanish buyers Meets EU requirements Low pricing High Oleoresin production
Chili Planting Areas in China

Linear Chili
Yidu Chili
Jinta Chili
Jinta Chili Yidu Chili
Sweet Paprika
Jinta Chili
American Red Chili Linear Chili
Yidu Chili
These areas primarily plant Sweet Chili, American Red Chili, Yidu Chili, Jinta Chili, and Linear Chili. These areas primarily plants Chaotian Chili in the Hebei, Henan, Guizhou, Yunnan, and Hunan Province.
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Chillies in China: Varieties & Overview
Main crop varieties include:
Chaotian
Jinta
Paprika
Thread chilies
Yunnan chilies
Yidu
American red
The difference is ASTA & SHU
Creating value isour our business Creating value is business
Paprika growing China
Basic Crop 2012
Kuerle
Akesu
Kashi
Yili/ Yili/ Changji
In Mou % Area
County Quality Bohu BEST
180,000 Mu 68%
Yanji BEST Hejing NORMAL Wensu NORMAL
40,000 Mu 15%
Baicheng NORMAL Alaer BEST Shufu LOW
16,000 Mu 6%
Yupehu LOW Zepu LOW
30,000 Mu 11%
Various Area MEDIUN
5/14/2013
Products made from Chili Raw Material
Chili whole pod
Chili crushed
Powder
Oleoresin Chili string Chili minced Chili ring
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Paprika -Crop Market Segments - China

Quantity 120,000 MT 4% 25%
54%
17% Oleoresin Whole Pods Ground/Crushed Others
5/14/2013
Crop Market Segments - China

Whole Pods 20000 MT Crushed / Ground 30000 MT
18% 14%
15% 23% 9%
24%
15%
27% 18% 37%
China Paprika Challenges 2013 Crop

Lower prices in CY 12 is a major de-motivator for farmers. Replacement by alternate crops. Growing region far away from export ports local transportation, cold storages and processing infrastructure. High ASTA captive oleoresin industry high capacity.
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China Paprika - Benefits

High carry forward of lower ASTA paprika in cold storage. VAT benefits more transformation Availability of seeds
China 2014 crop forecast

25% less planting lower crop High carry forward of low ASTA product ( 8000 -10,000 MT) Stable to low prices till Sept 2013 Prices trending higher from Oct 2013 More focus on transformation of available stocks.
5/14/2013
US Paprika growing areas
US Capsicums Production Data

Area Harvested (Acres)
25000 20000 15000 10000 5000 0 2010 2011 2012
Arizona California New Mexico Texas Unted States
Yields Per Acre

500 450 400 350 300 250 200 150 100 50 0 2010 2011 2012
Arizona California New Mexico texas United States
Production (1,000 cwt)

6000 5000 4000 3000 2000 1000 0 2010 2011 2012 Arizona California New Mexico texas United States
10
5/14/2013
US Paprika Production ( MM lbs)

US SW Paprika Production
1996 60 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
70
50
40 Millones
30
20
10
0 REDS
US Key Market Characteristics

Large producer of Capsicums Bell Pepper, Green Chile, Capsicum. High 2012 crop of ~ 32,000 MT ASTA medium quality ( 160 200 ASTA) Contract based farming Fully mechanized operations Dehydration Mechanized Tunnel or Continuous Lower competitive pricing Variety management higher ASTA, disease resistance.
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5/14/2013
Capsicum Growing - US
Crop is planted in March Mature green pods by Aug. Pods begin achieving red color Sept 1., due to carotenoid development Fields are defoliated prior to harvest
Capsicum US Harvest
One time single harvest .
Fields usually sprayed with sodium chlorate solution to defoliate plants and makes the pods easier to pick All of the New Mexico/Texas/Arizona crop is now mechanically harvested
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5/14/2013
Mechanical Harvest
All US crop is now mechanically harvested
Mechanized Dehydration
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5/14/2013
Capsicum Products - US
Paprika Ground, Flakes and Whole Table Capsicums ( Mesa) Red Pepper Ground, Flakes & Whole Chili Blends Oleoresins Paprika & Capsicum Specialty Peppers Jalapeno, Chipotle, Ancho, Guajilo and others
Consumption of Capsicums
Total Capsicums 160,000 MT
3%
39% Paprika 58% Red Pepper Capsicums - Others
Approximately 65,000 MT converted and consumed in Wet/Liquid Form.
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5/14/2013
Key Quality Attributes for Capsicum Products

Analytical
Extractable Color (known as ASTA Color) Visible Color (Scan) Pungency Particle Size Moisture Water Activity (Aw) Bulk Index Adulteration Indicators (Added colors, Contaminants) Base purity of the spice (Rodent Hair & Insect Fragments) Pesticide Residues
Microbiological
Salmonella Aflatoxin & Ochratoxin as an indicator of poor post harvest management SPC Yeast / Mold Coliform E.Coli
US crop - challenges
Weather Planting size Yields Disease pressure Competing Crops Carry forward stocks from other origins
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5/14/2013
US crop - outlook
Smaller 2013 crop compared to 2012 ( 10% drop) Pricing pressure from other origins Focus on cost management / mechanization Pricing increase in new crop
Overall Global outlook

High carry forward stocks in 2013
Lower pricing through 2013
Lower planting in 2013

Less available stocks in 2014 Higher pricing for good quality supply shortage
FSMA, Food safety and quality management critical

Farm management Pesticides Post Harvest management Toxins
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5/14/2013
Peru Capsicums to focus on..

Cost Management initiatives
Yield improvement Mechanization of agriculture practices
Agricultural Practices
Pesticide control and management
Post Harvest Management

Mechanical Drying Reduction of Toxins, Yeast & Mold, SPC Extraneous matter & Insect Fragment control.
Thank you
Questions ?
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5/14/2013

Capsicum Market Report China & US Vinay Sreekumar

Creating value is our business

Major Products: Products: Color, Heat and Flavor

Capsicums 20-27 species 100(0)s varieties

Mild Medium Hot Red Pepper Primary Origins India, China

Creating value is our business

Standard Pod Size

- generally, smaller the pod size, higher the pungency.

2012/ 13 Market Overview Capsicums

Continued Strong Demand

Market Pricing trend is Lower

Creating value is our business

2012 Global Production - Paprika 432MM lbs ( 196,000 MT)

China Peru 15% 61% US Europe Africa Others

Creating value is our business

2012 Paprika End Usage by Type

49% Ground Oleo 33% Whole Others

Creating value is our business

2012 Global Demand by Region ( 190,000 MT)

40% 17% US + Canada Europe China Mexico Others 29%

Creating value is our business

China Key Market Characteristics

Chili Planting Areas in China

Jinta Chili Yidu Chili

American Red Chili Linear Chili

Chillies in China: Varieties & Overview

Main crop varieties include:

The difference is ASTA & SHU

Creating value isour our business Creating value is business

Paprika growing China

Basic Crop 2012

Yili/ Yili/ Changji

Creating value is our business

Products made from Chili Raw Material

Chili whole pod

Oleoresin Chili string Chili minced Chili ring

Creating value value is our business Creating is our business

Paprika -Crop Market Segments - China

17% Oleoresin Whole Pods Ground/Crushed Others

Creating value is our business

Crop Market Segments - China

27% 18% 37%

Creating value is our business

China Paprika Challenges 2013 Crop

Creating value is our business

China Paprika - Benefits

Creating value is our business

China 2014 crop forecast

Creating value is our business

US Paprika growing areas

Creating value is our business

US Capsicums Production Data

Yields Per Acre

Arizona California New Mexico texas United States

Production (1,000 cwt)

Creating value is our business

US Paprika Production ( MM lbs)

Creating value is our business

US Key Market Characteristics

Creating value is our business

Creating value is our business