On March 9, the price of pepper in key pepper growing areas increased to 60,500 – 62,500 VND/kg, an increase of 2,500 VND/kg compared to the previous day and nearly 10,000 VND/kg compared to 10 days ago. This is the highest price since the second quarter of 2019.
Pepper prices have continuously increased since the New Year’s Eve. Especially in the last days of February – early March 2020, pepper prices have hot times in key growing areas. The reason for the rapid increase in pepper prices is attributed to Chinese traders buying more while the supply at the beginning of the season is not much. In addition, many pepper farmers believe that pepper prices this year will increase, so they should limit selling (only selling enough quantity to settle debts), which also contributes to reducing supply, causing prices to increase.
In fact, in many localities where pepper is grown today, farmers after harvesting do not bring it to agents. If the farmer sells pepper, the agent will keep it and not sell it after buying it. That has made the amount of pepper circulating on the current very little.
March every year is the time when Vietnam has a full pepper harvest, and every year this month is the lowest pepper price. But this year, pepper prices are very good and it is forecasted that in the coming months, pepper prices will continue to grow. According to the Vietnam Pepper Association, the average price of pepper in 2021 will be about 60,000 VND/kg
The actual record shows that the number of traders entering the pepper gardens is quite large to collect goods. The price they usually offer is higher than the online reference price. Pepper prices in the market are very good and beneficial to farmers, but due to low pepper prices a few years ago, farmers in Vietnam and other countries did not invest in development, resulting in low pepper harvest.
On the world market, pepper prices in Brazil and India are also increasing. Currently, the spot price of pepper at Kochi – India has increased by 350 rupees per quintal (0.98%) at 36,058.35 rupees per quintal. This price is the highest in about 1 year.
The increase in international pepper prices is a very important factor for the upcoming pepper trend, because although the supply in Vietnam is limited and the price is increasing strongly, it is unlikely that businesses will buy additional pepper from other countries. Brazil to serve export orders, because it takes at least 90 days for goods from Brazil – the world’s second pepper producer to arrive in Vietnam.
The total demand for pepper in the world is about 500,000 tons/year, Vietnam exports over 280,000 tons/year, accounting for about 56% of the world pepper market. This year, although Vietnam’s pepper area has decreased, there are many opinions that the export amount of pepper will not be lower than 60%, because there are some pepper growing areas in Cambodia that cannot be exported by themselves and have been sent to Vietnam. South, contributing to the total export volume of Vietnam’s pepper.
Currently, in Dak Nong, about three-quarters of the area has been harvested. Meanwhile, in other key pepper growing provinces, pepper has just begun to be harvested. Dak Nong currently accounts for about half of Vietnam’s pepper production, so usually, when this province harvests most of the area, it is enough to make the supply abundant, making it difficult for pepper prices to increase, even is decrease. But this year, while most of the pepper area in Dak Nong has been harvested and the price of pepper has increased sharply, it is highly likely that production has decreased sharply because many pepper gardens have been seriously degraded due to adverse weather. In 2020, plus the low price of pepper in the past few years, many farmers can no longer afford to invest in pepper gardens or are no longer interested in taking care of pepper plants.
The survey results of key growing areas in December 2020 by the Vietnam Pepper Association (VPA) showed that this year’s pepper production may decrease by 25-30% compared to 2020.
This year’s world pepper production is generally not high due to unfavorable weather. In Southeast Asia, despite the new season of pepper harvest, many farm owners have had to delay the harvesting process due to weather factors. Vietnam’s pepper output is estimated at only 150,000 – 180,000 tons, the lowest in the past 5 years and down nearly 30% compared to the previous crop, especially Gia Lai province, which is said to be the capital of Vietnamese pepper. In the South, production is estimated to decrease by up to 60%.
India’s pepper production in 2021 is also likely to be significantly lower than in 2020, as pepper planting and production is affected by erratic climatic weather, typically strong winds and rain. large in the regions of Idukki, Wayanad, Coorg and some areas in the state of Karnataka.
Meanwhile, the market continued to grow strongly because of high demand from European countries, the US and Asia, but the inventory decreased rapidly.
The total demand for pepper in the world is about 500,000 tons/year, Vietnam exports over 280,000 tons/year, accounting for about 56% of the world pepper market.
This year, although Vietnam’s pepper area has decreased, there are many opinions that the export amount of pepper will not be lower than 60%, because there are some pepper growing areas in Cambodia that cannot be exported by themselves and have been sent to Vietnam. South, contributing to the total export volume of Vietnam’s pepper.
In 2020, member units of the Vietnam Pepper Association exported a total of 182,908 tons of black pepper, accounting for 95.30% of the country’s total export volume. Besides, enterprises also exported 23,931 tons of white pepper, accounting for 93.65% of the total white pepper export volume of the country.
In January 2021, the country’s pepper exports of all kinds reached 16,896 tons, down 3,846 tons (18.54%) compared to the previous month, but compared to a year earlier, an increase of 2,130 tons (14.43%). ). The export value of pepper in the month reached 48.72 million USD, down 8.67 million USD, or 15.11 % down from the previous month; but also increased by 12.73 million USD, or 35.38% over the same period last year. The average export price of pepper in January 2021 reached $2,884/ton, up 4.23% compared to the average export price of December 2020.
With its position as a major pepper exporter in the world, the loss of Vietnamese pepper this year’s crop while strong international demand may push pepper prices up further in the near future, likely reaching VND 70,000. /kg, maybe even up to 90,000 VND/kg by the end of this year.
