South-east Asian crisis burns Chinas chilli farmers

17 February 1998

South-east Asian crisis burns Chinas chilli farmers

THE south-east Asian economic crisis has burned the fingers of chilli farmers in Shaanxi, north-west China, with exports for the spice down by 50% between October and January, according to producers.

Zhang Jianxin, sales manager of the Shaanxi Provincial Native
Products Export Company, said the overseas price for Qin chilli p/t has dropped
from Yn9,500 (£686) in October to Yn4,000 in January. Export volumes fell
two-thirds.

The Chinese province is the countrys biggest chilli producer. The product
generates annual export earnings of about $10 million (£6m) for the region, which
relies heavily on agriculture revenue. Some 80% of its chilli exports are
destined for south-east Asia, where economic turmoil has dampened appetites.

An official from the provinces foreign trade and economic department said in
a report published in the China Business Weekly that depreciation of local
currencies brought down spending and lowered the consumption of Qin chilli,
the local variety.

Chinas chilli farmers had hoped prices would rise this year following
droughts in 1997 in the north and flooding in the south which damaged much of
the crop.

• Financial Times 17/02/98 page 8