Vietnamese pepper exporters are in danger of breaking contracts because the goods are sold and circulated only among speculators, agents and people, but not in the hands of exporters.
New season pepper in Nam Yang, Dak Doa, Gia Lai…
Domestic pepper price in February increased by 1,000 – 3,500 VND/kg compared to January, fluctuating between 53,000 – 55,500 VND/kg. The momentum increased more strongly when entering March, pepper price increased to 66,000 VND/kg.
However, the current hot pepper price increase makes it difficult for exporters to purchase goods, even facing the risk of contract collapse. To clarify this issue, the writer had an interview with Mr. Nguyen Tan Hien, Deputy General Director of Tran Chau Import Export Trading Service Joint Stock Company, and Vice Chairman of the Vietnam Pepper Association (VPA).
What is the cause of this price increase, sir?
Mr. Nguyen Tan Hien: Pepper prices have increased recently, mainly people do not want to sell. If people sell, the dealer also hugs and refuses to sell. In general, goods are in the hands of people and speculation, not reaching the hands of exporters.
Vietnamese pepper exporters are in danger of breaking contracts because the goods are sold and circulated only among speculators, agents and people, but not in the hands of exporters.
Meanwhile, more than 90% of Vietnamese pepper is consumed through export.
It is normal for pepper prices to increase and decrease in the market, but agents have to sell to be able to regulate export and consumption of goods instead of just selling through hands from one person to another in the country, blowing prices up. high that cannot be exported to foreign countries.
How do businesses manage to export goods, sir?
Mr. Nguyen Tan Hien: The current situation is too difficult for businesses, not only for Pearl and all pepper export enterprises.
Last year’s price increase also had “people crying and laughing” because there were still a few businesses that could buy low prices to deliver to customers, but this year everyone had to “cry”.
Pepper exporters from the beginning of the year until now have almost sat and played. Buying at this time is very risky because the price is too high. No business dares to buy for fear that the price may reverse at any time.
Whereas before, exporters had signed contracts with customers but at low prices, by the time of delivery, they could not buy pepper or had to buy at very high prices and suffered losses. Expected in March, pepper exports will not be much.
Vietnam’s pepper output is forecast to decrease by 20%. There are many rumors that the supply is in short supply because Vietnam is accounting for nearly 60% of the world market share. How do you rate this issue?
Mr. Nguyen Tan Hien:The weather this year is cold, so pepper ripens a month later, so there is no stock after Tet. Exporters have not been able to purchase goods. Many rumors suggest that this year supply will fall short of demand due to reduced output.
However, overall supply is still higher than demand. The world’s pepper demand is now about 500,000 tons, while the supply in 2021 plus inventories of previous years is about 600,000 tons.
Orders are like every year, sometimes even less than last year because some customers still have inventory.
The price increase at the end of May last year was understandable because at that time the pepper harvest had ended. In addition, the previous pepper price was too low, only 37,000 – 39,000 VND/kg. Therefore, it makes sense for the price to bounce up after a long period of lows.
But now that it’s on the job, why is that happening? Recently, the price of Vietnamese pepper is in the range of 53,000 – 55,000 VND/kg, which is also relatively low. Anything that increases must also have an unusual growth path like this.
Farmers in Quang Tien commune, Cu Mgar, Dak Lak harvest pepper.
What advice do you have for pepper growers?
Mr. Nguyen Tan Hien: People should be careful, not too greedy, but need to harmonize with the interests of businesses because over 90% of Vietnam’s pepper is consumed through export.
People do not expect pepper prices to rise to 100,000 VND/kg but miss the current golden opportunity. Of course, the price of pepper can go up to 70,000 – 80,000 VND/kg, but not at this stage but at the time when Vietnam has finished harvesting and lacks goods.
Meanwhile, at present, the average daily harvest is 4,000-5,000 tons. At the current rate, there are still about 40 days left to complete the harvest.
The source of goods is so much, not so much that the price of pepper is pushed up too hot, one day even the price can increase to 4,000 – 5,000 VND/kg/day.
It is a sign of instability, unsustainable. The current price increase is still beneficial for people, but it needs to be balanced with the benefits of exporting enterprises.
How does the failure to export goods affect Vietnam’s pepper export market share in the world?
Mr. Nguyen Tan Hien: If Vietnamese enterprises cannot export goods, rival countries such as Brazil will take advantage of the opportunity to sell. This leads to Vietnam losing customers. In fact, the pepper industry has learned a similar lesson from last year’s price hike.
When customers have enough goods, the demand will drop sharply and the world pepper price will also plummet, then, Vietnam’s pepper industry has lost the opportunity.
According to the Vietnambiz
