The Vietnam Pepper Association (VPA) recommends that its member businesses exporting pepper should consider when selling under long-term delivery contracts because it is forecasted that pepper prices on the world market will likely increase in the near future. .
Exchange with TBKTSG Online On August 1, VPA Office Chief Tran Duc Tung said that in the past time, some pepper exporters have signed contracts for long-distance delivery, but by the time of delivery, the domestic price of pepper has increased so there is no pepper to be delivered to customers, but also appropriated the customer’s deposit, leading to disputes, lawsuits, and loss of reputation to Vietnamese pepper exporters.
“In order to ensure safety, pepper exporters should sell goods in the form of spot delivery and need to be careful in long-term delivery contracts because pepper prices are likely to increase further,” advised Mr. Tung.
The reason is that at the time of February 2012, the domestic price of black pepper was at 110,000 VND/kg, down about 8,000 VND/kg compared to the previous month, so some businesses forecast pepper prices in the near future to continue. decreased so signed a number of long-term delivery contracts.
But, from the end of April, the domestic pepper price started to increase again, to 120,000 VND/kg and is currently at 124,000 VND/kg, so it happened that pepper exporters did not deliver the goods that were signed earlier.
According to VPA, due to import demand and pepper prices in major consumer markets in the world such as Europe and the United States, since the beginning of this year have been quite stable at a high level, thereby pulling domestic pepper prices in other countries up.
VPA forecasts total pepper supply in 2012 (2012 output + inventory + temporary import for re-export) of Vietnam at about 115,000 – 120,000 tons. Domestic consumption is about 5,000 tons, so the export volume in 2012 is estimated at 110,000-115,000 tons (including temporary import for re-export).
According to the Ministry of Agriculture and Rural Development, it is estimated that pepper exports in the first 7 months of the year reached 80,000 tons, with a turnover of 546 million USD, down 3.2% in volume but up 20.3% in value over the same period last year. The average export price of pepper reached 6,814 USD/ton. The main pepper import markets of Vietnam are the US with 13.5% market share, Germany with 11.8%, the United Arab Emirates with 9%.
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