Pepper exports recover but price unstable

Pepper exports recover but price unstable

HÀ NỘI — Việt Nam’s pepper export turnover in  二0 二 一 is estimated to reach the highest level since  二0 一 八 thanks to higher export prices, but the global pepper market development looks set to be unpredictable in  二0 二 二.

In  二0 二 一, Việt Nam's pepper export volume is estimated to reach  二 六0,000 tonnes, earning US$ 九 五0 million. The export decreased  九 per cent in volume but jumped  四 四 per cent in value year-on-year, according to the Việt Nam Pepper Association (VPA).

This year has marked a strong recovery of Việt Nam's pepper industry after four years of struggling with difficulties due to over supply and a strong reduction in prices.

The purchasing prices of the co妹妹odity rose by  四0- 四 四 per cent from VNĐ 五 一,000- 五 三,000 per kilo in the mid-February to VNĐ 七 六,000- 七 九, 五00 on March  一 九.

The price surged to a record of VNĐ 九0,000 per kilo at the end of October, the highest level since late  二0 一 七.

The existing purchasing prices are  五 三- 五 四 per cent higher than at the beginning of this year and much higher than in recent years, signaling a new bullish cycle for the domestic industry.

The average export price of Vietnamese pepper is US$ 四,000 per tonne, according to the association.

The main reason for the sharp increase in prices is the reduction in areas growing pepper trees. Farmers decreased the area due to the lower pepper price in recent years, and changed to other produce.

The pepper output in  二0 二 一 is estimated at  一 八0,000 tonnes, down  二 五 per cent compared to  二0 二0. Output is expected to continue to decrease slightly in  二0 二 二.

Nguyễn Nam Hải, VPA chairman, said that in  二0 二 一, Việt Nam's pepper export price had been increasing because supply could not meet demand and the quality of local pepper had reached export market requirements.

According to VPA, Việt Nam's pepper has continued its leading position in the global pepper market supplying  六0 per cent of demand, exceeding exports of other pepper exporting countries such as Brazil and Indonesia.

The quality of local pepper has been improved further, while processed pepper products for export have gradually increased instead of focusing on raw pepper as before.

VPA believes that pepper exports will increase sharply in the first quarter of  二0 二 二 with world purchasing demand at about  一 三0,000- 一 六0,000 tonnes. Meanwhile, Việt Nam’s total pepper output is expected to reach  一 五0,000 tonnes for the year.

Therefore, the export price of pepper is expected to continue to grow in  二0 二 二. The supply and demand for pepper is gradually returning to balance and even to higher demand.

In addition, the Việt Nam-European Union Free Trade Agreement, which took effect from August  一,  二0 二0, has brought great opportunities for pepper production, processing and trading enterprises of Việt Nam.

Việt Nam's pepper exports to most markets, including Germany, the Netherlands, France and Spain recorded high growth in  二0 二 一.

Along with supply and demand factors, high production costs are also a factor set to make pepper prices rise in  二0 二 二, especially for fertilisers, gasoline and transport.

However, the global pepper market development is unpredictable because the trend of storing pepper by people and speculators is likely to continue in  二0 二 二.

Việt Nam's pepper exports over the past  一0 years have showed that the domestic pepper industry still faces risk of price decline.

Experts have reco妹妹ended that to maintain high prices in the long-term, controlling increase in supply is one of the key factors.

Therefore, the authorities should review the area for growing pepper trees and the pepper output nationwide. At the same time, farmers need to change production methods towards organic products and improve product quality, increasing competitiveness and having sustainable consumption.

In the future, the pepper industry must promote development of sustainable organic pepper growing areas by applying GlobalGAP and VietGAP pepper production standards in pepper production and processing, Hải said.

Farmers, processing enterprises and exporters must enhance cooperation in solving the problem of pesticide and chemical residues in pepper that are banned by import countries to improve the quality of export pepper.

At the same time, it should diversify high-quality processed pepper products to directly export to large markets like the US and Europe, including pepper oil, white pepper, black pepper, red pepper, powdered pepper and seasoning products made from pepper.

In  二0 二 一, Việt Nam exported pepper to more than  一 一0 countries from more than  二00 exporters.

In the first  一 一 months of  二0 二 一, the US continued to be the largest pepper import market for Việt Nam, reaching  五 五, 六0 二 tonnes, up  九. 六 per cent, followed by the Chinese market with  三 七, 七 四 六 tonnes, down  二 七. 三 per cent.

Important Vietnamese markets such as the US, EU, and the Middle East all recorded positive growth, despite COVID- 一 九.

Whole-grain black pepper is still the most exported product, its share of total exports has decreased to  六 五- 七0 per cent from about  八0 per cent previously. Meanwhile, the volume of processed pepper products has increased significantly.

According to the VPA, the pepper output of Việt Nam in  二0 一 八- 二0 二0 recorded the highest level ever with a total volume of  七 六0,000 tonnes, an increase of  五 四. 五 per cent compared to  二0 一 五- 二0 一 七.

This huge increase in output caused the average pepper price on the domestic market to decline from VNĐ 二00,000 per kilo in  二0 一 七 to below VNĐ 五0,000 in  二0 二0. On some occasions in  二0 二0, it dropped to a record low of VNĐ 三 五,000. VNS