Hungary is famous for its sweet peppers (also referred to as pepper, sweet pepper, capsicum, and paprika): it produces many different varieties of pepper, the most notable being Kapia Pepper - a small, sweet, red tapered bell pepper - and the White Sweet Pepper - a sweet pepper with white or light-green skin. The white pepper, also known as Wax Pepper or TV Pepper, is especially popular in Hungary, whereas the Kapia Pepper also does very well in the export market. Hungarian peppers are used to make the country’s famous spice mix: paprika. This mix has been spicing up Hungarian dishes such as Goulash for centuries.
According to Luxfood KFT, a Hungarian sweet pepper producer and exporter, Hungary accounts for approximately 1% of total world production, producing around 200K tons of peppers in 2018. 185K tons were harvested from greenhouses and 20K tons from open fields. The production and quality of sweet peppers have been increasing. Currently, around 65% of total production makes use of advanced integrated pest management systems. The total harvest area has also been increased by 4-5% in 2019, according to the company. The total production volume has increased by 7,200 tons between 2014 and 2018 and is expected to increase further.
The reason for this increased production volume and area is the increased demand for sweet peppers worldwide. Luxfood KFT paints a positive picture of global pepper demand. It has been increasing continuously: “In one short sentence: this is thanks to gastronomy and marketing.” Sweet peppers are eaten in almost every country, with some countries preferring the strong and hot varieties, and other countries preferring the sweeter, bigger varieties.. The only product that has seen a decrease in demand, is the white pepper. Domestically, the demand for Hungarian white peppers has been declining as especially “the younger age groups prefer the color-intensive types.”
Hungarian exports have decreased over the last few years, but not due to a decrease in global demand for Hungarian peppers. Luxfood KFT attributes this decrease in export to an increase in domestic demand for colorful sweet pepper varieties. Combined with low prices in the domestic market, more sweet peppers were destined for the domestic market rather than the export market.
The price of sweet peppers is heavily influenced by the weather and supply. Sunny weather affects the demand for sweet peppers: the sunnier the weather, the more peppers sold and the higher the price. Oversupply puts downwards pressure on the prices. In 2018, there was a lot of supply on the domestic market. The harvest started earlier than usual due to warm weather. However, peppers from Jordan and Morocco were still on the market, meaning that Hungarian peppers could not be exported until late June. This led to lower prices. This year, prices have normalized again and Luxfood KFT expects to sell 20% more peppers than last year.
The company prices their peppers competitively. Their EXW price is 1.48 EUR/kg for white peppers, 1.85 EUR/kg for Kapia peppers, and 2.58 EUR/kg for Ramiro peppers. The price for Kapia peppers has gone down by 7.5%, whereas the price for white peppers and Ramiro peppers has increased by 33% and 24% respectively.