Market evolution: Pepper and capsicum products (CN 0904) — 2015–2025
Introduction
This report analyses the evolution of the European Union's trade in pepper and capsicum products (Combined Nomenclature code 0904) between 2015 and 2025. The code encompasses pepper of the genus Piper (both whole and processed) and dried or processed fruits of the genus Capsicum and Pimenta (such as paprika and chillies). Over the decade, the EU's trade in these spices has exhibited significant growth in volume, notable shifts in sourcing and destination markets, and evolving price dynamics. This analysis examines the core trends in trade values, quantities, and prices, identifies the key partners and their changing roles, and explores the market's structural concentration and volatility to provide a comprehensive overview of the sector's development.
1. Robust Volume Growth with Divergent Price Trajectories
The EU's overall trade in this category expanded considerably in terms of physical volume, while values showed more varied performance. Import volume grew more strongly than export volume, yet the trade deficit in value terms narrowed slightly over the period.
1.1 EU Import Expansion Fueled by Volume Increases
Between 2015 and 2025, EU imports of pepper and capsicum products grew by 35.8% in quantity, rising from 139,965 tonnes to 190,042 tonnes. Despite this substantial volume growth, the total value of imports increased by a more modest 5.5%, from €689.6 million to €727.7 million. This divergence is explained by a significant decline in the average import price, which fell by 22.3% from €4,927 per tonne to €3,829 per tonne (General Overview). This suggests that the EU was sourcing its increased import volumes from lower-cost origins or that global market prices for these commodities experienced deflation.
1.2 EU Exports Show Strong Value Appreciation
In contrast, EU exports saw their value increase more rapidly than volume. Export volumes grew by 39.9%, from 41,061 tonnes to 57,464 tonnes. Export values, however, rose by 40.4%, climbing from €194.3 million to €272.9 million. The average export price remained relatively stable, with a marginal 0.3% increase over the period, indicating that the EU was able to maintain or slightly improve its export pricing despite expanding shipments (General Overview).
1.3 A Narrowing Trade Deficit
The EU consistently ran a trade deficit in this product category, but its magnitude has decreased. The deficit in value terms shrank by 8.2%, moving from -€495.3 million in 2015 to -€454.8 million in 2025. This reduction occurred despite rising import volumes, highlighting the positive impact of strong export value growth on the overall trade balance (General Overview).
2. Shifting Global Partnerships and Increased Sourcing Concentration
The landscape of the EU's trading partners for these spices underwent a significant reshuffling over the decade, with notable changes in the major suppliers and a rise in import market concentration.
2.1 The Rise of Vietnam and China, The Decline of Indonesia and Brazil
The origins of the EU's imports changed markedly. Vietnam solidified its position as the top supplier, with imports growing by 33.0% in value to €282.4 million. China saw even stronger growth, increasing its share by 59.2% to €180.9 million. Conversely, imports from traditional suppliers like Brazil (-37.6%) and especially Indonesia (-62.1%) and India (-39.8%) fell dramatically. This shift could reflect changes in production competitiveness, trade agreements, or sourcing strategies favoring Asian origins (Top Partners by Value - Imports).
2.2 Export Growth Led by the United States and the United Kingdom
The United States became a far more important destination for EU exports, with shipments increasing by 67.7% in value to €87.8 million. The United Kingdom remained the second-largest market, with stable growth of 7.0% to €54.1 million. Other markets like Canada (+44.2%) and Egypt (+81.6%) also showed strong growth, indicating broadening demand for EU-processed or re-exported pepper and capsicum products (Top Partners by Value - Exports).
2.3 Rising Concentration in Import Supply
The Herfindahl-Hirschman Index (HHI), a measure of market concentration, rose by 29.1% for imports in value terms, from 1,785 to 2,304. This increase indicates that the EU's import market became more concentrated, with a larger share of trade flowing to fewer key partners, namely Vietnam and China. The concentration of the export market remained relatively stable (HHI change of +0.9%), suggesting a more diversified set of destination countries (Concentration HHI).
3. Divergent Specialisation Within the EU and Notable Supply Shocks
The internal EU market structure shows clear patterns of specialisation among Member States, while the period was also marked by several price volatility shocks linked to specific partner countries.
3.1 Spain: The EU's Dominant Specialist Exporter
Analysis of revealed comparative advantage (RCA) for 2025 shows that Spain is by far the most specialised EU Member State in this product category, with an RCA of 4.22. Spain accounts for 24.5% of EU production in value terms but a much smaller 5.8% share of total EU exports, suggesting it is a major producer serving both the internal and external markets. Other specialised smaller economies include Latvia and Estonia (Most Specialised Reporters).
3.2 High Volatility from Emerging and Smaller Suppliers
The coefficient of variation (CV) for import values highlights partners with the most unstable trade flows. While major partners like Vietnam (CV=0.23) and Brazil (CV=0.29) showed moderate volatility, very high volatility was observed for smaller suppliers such as Zambia (CV=0.85) and Thailand (CV=0.54). For exports, Norway (CV=0.33) and Algeria (CV=0.45) showed the highest volatility among the top partners, indicating more unpredictable demand from these markets (Volatility Bars).
3.3 Significant Price Shocks in 2021-2022
The data detects several abnormal price shocks. A major import price shock occurred with China in 2022, where a 31.3% price increase was deemed highly abnormal. This coincided with a period of global supply chain disruptions. Similarly, a notable export price shock was recorded for Australia in 2022 (25.3% increase) and for Japan in 2021 (15.6% increase). These events likely reflect pandemic-related logistics bottlenecks and cost pressures impacting specific trade corridors (Top Shock Events).
Conclusion
Over the 2015–2025 period, the EU's trade in pepper and capsicum products has been characterised by robust expansion in trade volumes, particularly in imports. This volume growth, however, occurred alongside falling average import prices, which moderated the increase in total import value. On the export side, the EU managed to grow value in line with volume, leading to a modest reduction in the overall trade deficit.
The sourcing landscape has fundamentally shifted, with Vietnam and China becoming overwhelmingly dominant suppliers, displacing Indonesia and Brazil. This has led to a more concentrated import market, posing potential supply chain risks. Within the EU, Spain's role as a specialist producer and exporter is pronounced. The period was not without turbulence, as evidenced by significant price shocks in key trade links during 2021 and 2022, highlighting the market's vulnerability to geopolitical and logistical disruptions. Overall, the EU market for these spices has become larger, more reliant on Asian supply, and more integrated into global value chains, with processed capsicum products (090422) being a key driver of export performance.