Prices increase, costs also increase
Statistics from the Department of Agriculture and Rural Development of Gia Lai province show that, by the end of 2023, the whole province will have 8,798 hectares of pepper, with an output of about 28,580 tons. Chu Se and Chu Puh are the two districts with the largest pepper area in this province.
After the mass death of pepper, Mr. Nguyen Phuoc (village 6, Ia Blang commune, Chu Se district) switched to organic farming. Not using chemical fertilizers or overexploiting crops like before, Mr. Phuoc uses manure and fish compost as fertilizer to both reduce costs and help the garden grow and develop well. Thanks to that, more than 600 pepper pillars of business remained green for the 8th year, giving stable output. This year, he harvested more than 2.7 tons. “Organic pepper farming, although the yield is slightly reduced compared to using chemical fertilizers, the garden develops sustainably, has few pests and has a long lifespan,” Mr. Phuoc shared.
People in Chu Se and Gia Lai harvest pepper
Mr. Nguyen An Thanh, Director of Cu Kuin District Agricultural Production, Trade and Services Cooperative (Dak Lak), said that rising pepper prices make farmers excited, creating motivation to continue to stick together. “In 2015, pepper peaked in price at over 200,000 VND/kg. Many people prosper thanks to the pepper tree. However, not long after that, the price of pepper plummeted, combined with a deadly disease epidemic, leaving many people empty-handed and in debt. The area of pepper decreased seriously due to deaths due to epidemics, people switched to growing coffee, durian…, Mr. Thanh said.
According to Mr. Thanh, from the beginning of 2024 until now, pepper prices have increased sharply. In September 2023, Mr. Thanh sold 10 tons of pepper for 77,000 VND/kg, now the price has doubled. He estimated a loss of more than 1 billion VND. Mr. Thanh said that pepper prices have increased, but the cost of investing and harvesting this type of agricultural product is also equally high. Not to mention, this year, the pepper crop failed seriously. According to Mr. Thanh’s calculations, the rate of crop failure is up to 50%, due to rain at the time of flowering and fruiting, and later prolonged drought. In order for people to live with pepper, Mr. Thanh believes that the price must be stable at 150,000-180,000 VND/kg.
Not attractive to growers
This year, pepper growers did not sell massively like previous years due to the support of rising prices of some other agricultural products such as durian and coffee. Mr. Tran Van Tam, Hoa Thuan Trading Company Limited (Buon Ma Thuot City, Dak Lak), shared that he was quite surprised when pepper prices increased in recent times. Currently, pepper ranges from 140,000-160,000 VND/kg, nearly twice as high as last year. Although the price is high, the number of farmers selling is not much. People even buy back from agents and companies to make a profit. At his company, farmers come to buy at least 1-2 tons, some buy up to several dozen tons. However, according to Mr. Tam, pepper prices go up and down every day, even every hour.
Mr. Hoang Phuoc Binh, Permanent Vice President, General Secretary of Chu Se – Gia Lai Pepper Association, analyzed. Vietnam is the main pepper exporter, accounting for 60% of world export output, but the area and output in recent years have continuously decreased. Therefore, the general price trend will continue to increase, because supply is lacking compared to demand.
Mr. Binh added that the reason for the supply shortage is because in the previous cycle (from 2006 to 2015), pepper prices peaked (220,000 VND/kg). However, after that, from 2016 the price dropped to the bottom, in 2020 with 34,000 VND/kg. While the production cost is over 50,000 VND/kg, it is profitable.
Dak Lak province has over 28,500 hectares of pepper, with output in 2024 expected to reach nearly 74,630 tons. According to Dak Lak Department of Industry and Trade, in the first 3 months of the year, Dak Lak exported 7,937 tons of pepper worth 34 million USD; Compared to the same period last year, an increase of 64% in volume and 48% in turnover.
“When prices are high, people rush to grow pepper without knowing about farming techniques and solutions, as well as the effects of climate change and pests, so many peppers die. Price losses and many deaths resulted in a serious shortage of acreage. The country’s recent harvest reached 170,000 tons, while world demand is more than 500,000 tons/year. Thus, if Vietnam exports 60% of the market share, it must export 300,000 tons. Where does the problem of spending time come from? The inventory is gradually running out,” Mr. Binh said.
According to Mr. Binh, recently, pepper prices have jumped from 80,000 VND/kg, at the end of the 2024 harvest, to now 160,000 VND/kg. The International Pepper Association predicts that prices will likely be even higher.
Mr. Binh said that this is the beginning of the cycle of price increases, this cycle continues to last about 10 years. Along with that, the current price of pepper is still not attractive for people to grow again. Because durian and coffee are at very good prices; The lands where durian and coffee are grown are also the same areas where pepper was grown in the past. According to Mr. Binh, no one at this time destroys durian or coffee gardens to grow pepper, unless the price is over 500,000 VND/kg…
More erratic than SJC gold price
As recorded by reporter Tien Phong, pepper prices on June 18 increased sharply by 3,000 VND compared to the day before. In the Central Highlands, pepper prices are trading at 158,000 – 160,000 VND/kg. In the Southeast, the price is from 158,000 – 159,000 VND/kg. Compared to mid-May, pepper prices have now increased by more than 30%, or about 40,000 VND/kg.
However, the price of agricultural products considered “black gold” fluctuates more erratically than SJC gold, increasing sharply and then suddenly falling sharply. A week before that, pepper prices at one point increased to 180,000 VND/kg, an increase of up to 50% in just 1 month, surprising all growers and businesses. This is said to be the strongest pepper price increase ever.
Duong Hung
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