Today (March 17), pepper price in the Central Highlands region continues to increase by 1,000 VND/kg compared to yesterday (March 16) and is trading from 70,500 – 74,500 VND/kg. Previously, it increased from 1,000 to 1,500 VND/kg compared to March 15.
Specifically, Binh Phuoc costs 73,500 VND/kg, Dak Lak and Dak Nong provinces cost 72,500 VND/kg, Gia Lai province, at 71,500 VND/kg, in Dong Nai the lowest price is 70,500 VND/kg. Ba Ria – Vung Tau province alone reached the highest level of 74,500 VND/kg.
Notably, on March 15, the price of pepper on the free market was higher than the reference price of 2,000-4,000 VND/kg, in some places traders came to ask for the price of 76,000 VND/kg. These prices doubled in the same period last year and increased about 20,000 VND/kg compared to the previous month.
Pepper prices in the market are going against the norm
Commenting on the fact that the pepper price in the market is going against the norm and increasing hot recently, many businesses believe that the new pepper crop has just begun to be harvested, and it is expected that the end of April will end, so the output of commodities In the market, pepper prices have not been much, but the price of pepper has increased rapidly in recent times, there has been a phenomenon of pepper growers with the mentality of “picking up goods and not selling quickly”, while traders go to key pepper growing areas to buy together to “hold goods”. “Waiting for the price to increase further, leading to the phenomenon of local pepper scarcity at the moment.
“Price is high, the first beneficiary is farmers, but speculators are uncertain. However, in the market, there has been a phenomenon of hoarding goods waiting for prices, making it difficult for export companies to buy enough goods to deliver to customers according to their requirements. signed contract, that’s not counting the increase in price, the business suffers a loss compared to the signed price.After April, pepper is in full harvest until the end of April, when the crop is over, plus Cambodian pepper has flooded in. The market is abundant, pepper prices may not be as good as they are now, so growers should consider when to sell,” a business shared.
According to statistics of the General Department of Customs, in February 2021, the export amount of pepper reached 13,428 tons, with a turnover of 38,923 million USD, down 20.5% in volume and 20.1% in value compared to the same month. February 2020. In the first 2 months of the year, pepper exports reached 30,291 tons, with a turnover of 87,558 million USD, down 25.3% in output and 6.5% in value over the same period in 2020.
Vietnam’s black and white pepper prices increased 11% from last week, averaging $2,697/ton for black pepper and $4,215/ton for white pepper.
The export volume of pepper in the first 2 months of the year decreased sharply compared to the same period last year because February fell during the Lunar New Year holiday, and the scarcity of empty containers pushed up logistics costs. The turnover since then also decreased by 6.5%, to 87.56 million USD, equivalent to the price of about 2,890 USD/ton of export pepper.
To avoid risks, businesses should not sign long distance delivery contracts
According to Mr. Nguyen Nam Hai, President of VPA, pepper prices in the domestic market increased more than the same period last year thanks to many factors, including the fact that the main markets of Vietnamese pepper are gradually less affected. Due to the Covid-19 pandemic, consumption has increased, although until now there is still a shortage of containers, it is not a big determining factor for Vietnam’s pepper exports.
The pepper harvest this year is later than previous years, so far the country has only harvested about 30-40% of the area and the pepper price is being dominated by domestic speculators. Forecast, pepper output this year is estimated at 150,000-180,000 tons, the lowest in the past 5 years. Pepper production in other countries is also decreasing due to the effects of climate change. Although global pepper production is forecasted to decrease and consumption demand in the Americas, Asia, Europe and India markets is on an uptrend, the increase is not commensurate with the current price of raw materials.
“With the current situation, pepper prices will not increase much more, but it will be difficult to reduce prices like before. Vietnam is harvesting pepper, but the increase in pepper prices shows that there is market demand. According to a survey by VFA, in In 2021, Vietnam’s pepper output will decrease by about 25% compared to the previous season,” said Mr. Hai.
According to businesses, the continuous increase in pepper prices from the end of February until now is something “unusual”, while output and export prices have not increased commensurately. Therefore, people should not borrow money to store goods or expand pepper growing areas like in 2015-2016.
According to VPA, pepper prices are being dominated by domestic speculators, so exporters do not sign long-term delivery contracts to avoid risks. For signed contracts, businesses should adjust the delivery schedule, or buy an alternative market or negotiate to compensate for the contract.
