Hot development, unclean production, output deadlock along with trade barriers set by partners are causing the pepper industry to face a year full of risks, at risk of crop failure, loss of position. leader of the world pepper industry.
The Ministry of Industry and Trade said that from the beginning of January 2018 until now, pepper prices in the domestic market continued to fluctuate in a downward trend. Currently, the average pepper price is from 61,000 to 64,000 VND/kg, down 7,000-8,000 VND/kg compared to the beginning of the month and only half of the same period in 2017.
Pepper prices have fallen sharply in the past two years due to a sharp increase in planted area. According to the Department of Crop Production, Ministry of Agriculture and Rural Development, in 2010, the whole country planted only 51.5 thousand hectares of pepper; in 2014 increased to 85,591 thousand ha; by the end of 2017 is 152,668 ha, an increase of 196.3% compared to 2010, an increase of 22.5% compared to 2016, exceeding the planning by over 100,000 ha.
Price plunge, many barriers
Regarding exports, according to the statistics of the General Department of Customs, in the first 15 days of January 2018, the export volume of pepper reached 6,654 tons, worth 28.16 million USD, up 71% in volume and up 0.3 % in value over the same period last year. The average pepper export price in the period was at $4,232/ton, down 41.3% compared to the average export price in the same period in 2017.
According to estimates, in January 2018, export pepper reached 12 thousand tons, worth 51 million USD, up 43.5% in volume, but down 17.5% in value compared to January 2017. The average pepper export price in January 2018 was at $4,250/ton, down 42.5% compared to the average export price in January 2017.
Previously, in 2017, the export volume of pepper reached 214,855 tons, worth 1.12 billion USD, up 20.9% in volume but down 21.8% in value compared to 2016. In which, the United States was the market. Vietnam’s largest pepper export market in 2017 with a volume of 38,861 tons, worth USD 221.2 million, down 1.9% in volume and 35.4% in value compared to 2016.
The European Union (EU), Vietnam’s second largest pepper export market, in 2017 imported 25,739 tons from Vietnam, worth US$156.5 million, down 0.3% in volume and down 39.9 % in value compared to 2016.
Pepper exports to India in 2017 reached 16,262 tons, worth 78.8 million USD, up 46.3% in volume, but down 6.4% in value compared to 2016.
The Ministry of Industry and Trade forecasts that in 2018, pepper exports will continue to face many difficulties when supply is exceeding demand. The rapid increase in pepper area in Vietnam and some other countries has led to a sharp increase in global production. World pepper production in 2016 reached 434,000 tons, in 2017 it increased to 510,000 tons.
Pepper productivity in 2018 also decreased sharply due to prolonged rain in 2017, leading to the inability to cut water, stimulate pepper for pepper and make many pepper gardens susceptible to pests and diseases. In Ba Ria – Vung Tau province, pepper output is only 60-70%.
According to the Vietnam Pepper Association, in 2018, pepper productivity in some major producing countries, including Vietnam, may decrease, but due to the growing area for harvest, the total global supply will still increase. higher than 2017 and higher than demand. This makes world prices tend not to increase.
Besides, Vietnam’s pepper exports will be difficult due to technical barriers from importing countries such as the US, EU… The US Food and Drug Administration (FDA) is planning to consider raising the limit. the maximum allowable limit for MRLs of some active ingredients including Arcrimnathril, Tricyclazole, Metalaxyl… for Vietnamese pepper imported into the US.
Similarly, by the end of 2016, the European Commission (EC) is expected to raise the Metalaxyl MRLs for imported pepper from 0.1ppm to 0.05ppm. However, before the objections of Vietnam and India, the EC kept the Metalaxyl MRLs at 0.1ppm until the end of 2018. Therefore, without good quality control, Vietnam will gradually lose market share in EU as well as in the United States, India.
Recently, to protect the production of domestic pepper farmers, India has imposed a minimum tax on imported pepper. Previously, a ton of Vietnamese pepper exported to India cost $5,000, now it has increased to $8,000 per ton. This directly affects the competitiveness of Vietnamese pepper
How to decide the price?
Thus, 2018 is a year when the Vietnamese pepper industry has to compete very fiercely, so to compete successfully, it must have an advantage. However, frankly speaking, this industry still has many shortcomings due to overheating.
According to the plan of the Ministry of Agriculture and Rural Development by 2020, the total pepper area of the country is only about 50,000 hectares, but by 2017, the actual pepper area of the whole country is estimated to have increased to 120-130 thousand hectares.
Regarding the price of pepper, many countries are now importing pepper from South American countries because the price is cheaper than 2,000-3,000 VND/kg. According to Mr. Nguyen Nam Hai, Chairman of the Vietnam Pepper Association, Brazil’s pepper price is very cheap, so many customers are focusing on buying Brazilian pepper. That also means that Vietnamese pepper is facing difficulties in North American markets.
Besides, the technical process is not guaranteed, farmers plant anywhere without knowing if the soil is suitable. In particular, the abuse of chemical pesticides is very common. Although it is considered as a billion-dollar export industry, there are no qualified varieties, lack of focus on processing and branding.
Facing this situation, the Ministry of Agriculture and Rural Development said that the first thing to do is to restructure the industry towards clean production and limit the abuse of pesticides and chemicals, which is necessary for sustainable development of the lake industry. spend in the near future.
As for state management, the Ministry of Agriculture and Rural Development requires the ministry’s directing units to soon focus on seed work, closely attaching management and research to the needs of enterprises and the market.
Strengthen the management of agricultural materials such as fertilizers and pesticides, encourage switching to organic fertilizers, and soon review each sub-region to evaluate the technical process. Besides, it is necessary to research on breeding and quality control of pepper varieties.
Mr. Le Quoc Doanh, Deputy Minister of Agriculture and Rural Development, emphasized how the association and localities must “handle” the market and proactively set prices for the pepper industry in the international market.
“We are in the position of being the leader of the world pepper industry, but we have not shown this position yet. Therefore, from 2018, the Ministry of Agriculture and Rural Development will pay special attention to developing a strategy to improve the position of the pepper industry,” said Mr. Doanh.
Mr. Nguyen Nam Hai – Chairman of Vietnam Pepper Association
In fact, many enterprises have put the final product of pepper into supermarkets and restaurants, but domestic consumption is difficult to increase sharply because the domestic processed food industry has not yet developed. Therefore, there is only one way to develop sustainable production. Here, pepper farmers need the combination and indispensable support of export enterprises.
Mr. Nguyen Xuan Cuong – Minister of Agriculture and Rural Development
The pepper industry is growing too fast, leading to limited restructuring. If no action is taken soon, the risk of falling behind is very clear, the pepper industry agreed not to increase but to reduce the area, because production is for efficiency, not a race for productivity. It is suggested that localities together with agricultural extension agencies must resolutely propagate so that people can change their perception, should not plant if they find it unsuitable, dead pepper should not be replanted, leaving the area for other crops to grow. higher efficiency.
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