Don’t let the farmers take care of themselves

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If we look at the statistics of the Food and Agriculture Organization of the United Nations (FAO) and the International Trade Center (ITC), it can be seen that the comments of the President of the Vietnam Pepper Association (VPA) ) about the fact that Vietnamese farmers today have been able to regulate the world pepper price is reasonable. However, how to regulate to benefit yourself is a floating story.

Two “upstream” trends of world prices

From the statistics on the quantity and value of pepper exports from FAO and ITC, it is possible to draw a chart of the export price of pepper of our country compared to that of the remaining 35 pepper growing countries in the world (later below). hereinafter referred to as 35 other countries) as below.

Accordingly, in the period 1991-2000, our country’s export price of pepper was continuously lower than the average price of 35 other countries, and in the next 10 years, only two years (2007 and 2008) had higher prices. .

Export prices lower than competitors’ prices not only mean economic losses, but this fact also means that we cannot regulate world pepper prices.

However, starting from 2011 up to now, the following two very clear opposite price trends can be seen:

Firstly, during the six years (2011 – 2016), our country’s export price of pepper was not only almost continuously higher than the average price of 35 other countries, but the level of “top-separation” became clearer and clearer. .

Specifically, at the time of 2011, with the export price of 5,913 USD/ton, our country’s price was only 368 USD/ton higher and 6.6% higher than the average price of 35 other countries. At the time when the world pepper price reached an all-time record (2015), this gap reached a record of 944 USD/ton and 10.9%.

Thus, if compared with 2010, the export price of pepper in 2015 of our country increased to 5,970 USD/ton, equivalent to 165.6 %, while the average price of 35 other countries increased only 5,001 USD/ton and 137.7%.

Second, on the contrary, after the process of “finding the bottom”, reducing prices and narrowing the gap with competitors from January 2016 to January this year, our country’s export pepper price from February to January Now it is continuously being pulled down and getting lower and lower.

Specifically, by pushing the export volume to over 20,000 tons/month in the first three months of 2016 (March to May 2016), the export price of our country’s pepper was significantly lower than that of competitors. competitive (322 – 641 USD/ton, equivalent to 3.9 – 7.7%). After that, with a sharp decrease in export volume again, the higher price gap was re-established and the whole year price was only $427/ton (5.6%) higher than other countries.

However, since February 2017, with the push of export volume to unprecedented records, our country’s export price of pepper has plummeted to only $4,719/ton in June. over the past year, that is, a decrease of USD 2,677/ton (36.2%) compared to January. Meanwhile, the export prices of the remaining eight major pepper producing countries of the world, although also decreased sharply, but the corresponding decrease is only 1,118 USD/ton (16.1%).

Looking back at Vietnam’s “leading” role

If in the period 2011 – 2015 we are the “leading” to pull the export prices of competitors to increase, then from the beginning of the year until now, we are still the “leader”, but we are pulling export prices. Competitors’ exports decrease.

Why is there this… paradox of “the locomotive”?

If you look at the picture of world pepper production by FAO, it can be seen that the limited supply is the main reason why pepper prices have started to rise sharply since 2011 (after reaching a record 443,000 tons in 2006, production output reached a record 443,000 tons in 2006. world pepper production almost continuously decreased and in 2012 reached the bottom with only 411,000 tons).
However, the question continues to be, according to the statistics of Vietnam and Malaysia (from IPC sources in Indonesia), why the total world pepper production in 2015 is estimated to have increased sharply to 497,000 tons. but the world pepper price is still at a record high?

It can be said that this solution lies in the regulation of world pepper prices by Vietnamese farmers.

That is, despite such a record season and a record output of 177,000 tons, our country’s export volume in 2015 only reached 131,000 tons, a sharp decrease of 23,500 tons and 15.2% compared to 2014. No However, the statistics of ITC also show that, in this year, our country’s imports have increased dramatically and reached 22,300 tons.

This fact means that about 60,000 tons have been deposited, causing our country’s share in the world “pepper basket” to plummet to only 31.2%, while in 2014 it reached a record of 38.3. %.

At present, the reason why our country’s pepper price has dropped without braking is because we “released the goods” too strongly. In just nine months, we exported 181,000 tons, up 23.3% y/y and far ahead of 2015. Meanwhile, the total exports of eight other major pepper producing countries in in the first half of this year only reached 51,300 tons, a slight decrease of 1.8% over the same period.

Collectively, the total export volume of pepper of Vietnam and eight other major pepper producing countries in the first six months of this year reached 177,000 tons, up 11.6% over the same period. This fact refutes the assumption that Vietnam’s export price has dropped sharply due to weak world demand and poor quality of Vietnam’s pepper…

State support is needed

With the market share almost continuously increasing, although Vietnamese farmers have played an increasingly strong role in regulating the world pepper market since 2011 until now, it is clear that we are harming ourselves. Because we have not only missed the golden opportunity in 2015, but also are suffering the consequences of “holding the goods” too much at the time of the hot fever, so we have been, are and will definitely continue to continue. accelerate the “discharge of goods causing flooding” of the world pepper market.

The main reason probably lies in the fact that, although thousands of farmers in our country have enough economic potential to regulate the consumption of their goods, they are still ignorant about the overall balance of supply and demand of the pepper market. world.

Therefore, instead of just general advice, something like farmers should not massively expand the area… the management agencies need to shoulder the responsibility of collecting the necessary data to paint a picture of the situation and prospects of the world pepper market.

Follow Nguyen Dinh Bich (thesaigontimes.vn)


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