Marketing & Business Profile : Hot Pepper (Capsicum chinense)

 

Introduction

Hot pepper has remained one of Jamaica ‘s most promising non-traditional export crop. There are many varieties of hot pepper, however the ones that are of economic importance in Jamaica are the Scotch Bonnet and West Indian Red peppers.

The fruit can be used in many different ways, however it is mainly used fresh in cooking as a spice and in the manufacture of sauces and seasoning.

Why invest in HOT PEPPER?

An available market

Easy access to production and marketing information

Relatively low start-up capital

High returns on investment under good management.

Production Issues

The hot pepper plant does best in conditions of free draining and fertile soil, exposure to at least 80% sunshine and where the incidence of pest is relatively low. One of the major economic pest is the Gall Midge which has resulted in the fumigation of fruits entering the USA market.

Pest management is therefore very critical in the production of good quality peppers.

Hot peppers are widely grown in all parishes in Jamaica , but mainly in Westmoreland, St. Elizabeth, Manchester , St. Thomas , St. Ann and St. Mary.

Investment

The size of the initial investment is dependent on whether the crop is irrigated or not. Irrigation can increase the investment cost by as much as 30% which is recovered as yield increases up to 70% an therefore recovered over time.

The most economical acreage for investment is one (1) hectare at a cost of $350,000. The average yield is 9,500 kg / ha and the average cost of production is $37.00 / kg.

Market Potential

Demand for by both the local and export markets is overwhelming.

Local market

The market is divided into fresh and processing, with the demand by the processing industry exceeding that of the fresh market. This is due to the expansion of the processing industry especially Walkerswood Processing Industry in St. Ann .

Export Market

The main export markets are USA , UK and Canada and depending on the overseas demand, the quality may vary to supply both the fresh as well as the processing industry.

The overall peak demand for peppers is between November – March.

It is important to note that Jamaica has never been able to satisfy the demand for this product as shown by the import figures in the table below.

Table 1. Import / Export data for Hot Peppers (2000 – 2004)*

* Source – Jamaica Exporters Association

 

Year 2000 2001 2002 2003 2004
Export (kg) 252,351 842,948 587,325 310,117 204,911*
Value ($) 625,514 327,644 242,501 696,206 594,937
Import (kg) 504,870 485,939 381,823 626,455 528,617**
Value ($) 26,018,262 51,651,883 37,627,364 70,910,702 57,301,250

** Source – STATIN

Market Price

The market price varies significantly for the processing versus the fresh markets as well as based on the demand and supply system.

Local fresh market: 88-.00 – 154.00 / kg