Vietnamese pepper exporting enterprises face the risk of contract break because goods are only sold and circulated among speculators, agents and people, not to the exporters.
Domestic pepper prices in February increased by 1,000 – 3,500 VND / kg compared to January, fluctuating between 53,000 and 55,500 VND / kg. The momentum increased when entering March, the price of pepper increased to 66,000 VND / kg.
However, the current hot rise in pepper prices makes it difficult for exporters to purchase goods, even at risk of contract collapsing. To clarify this issue, the writer has an interview with Mr. Nguyen Tan Hien, Deputy General Director of Tran Chau Import Export Trading Service Joint Stock Company, and also the Vice President of Vietnam Pepper Association (VPA).
What is the cause of this price increase, sir?
Mr. Nguyen Tan Hien: Recently, people do not want to sell pepper because pepper prices have increased recently. If people sell, the agent will also refuse to sell. In general, goods are in the hands of the people and speculation, and cannot reach the exporter’s hands.
Vietnamese pepper exporting enterprises face the risk of contract break because goods are only sold and circulated among speculators, agents and people, not to the exporters.
Meanwhile, more than 90% of Vietnamese pepper is consumed via export sugar.
The increase and decrease of consumer prices is a normal thing in the market, but agents have to sell to regulate exports and consumption of goods instead of selling by hand from person to person in the country, blowing prices. 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 just for Pearl and the entire pepper exporting enterprise.
In the price increase last year, there were still “people crying and laughing” because there are still a few businesses that can buy at low prices to deliver to customers, but this year everyone has to “cry”.
Pepper exporting enterprises from the beginning of the year until now are almost sitting around playing. Buying now is very risky because the price is too high. No business dares to buy in for fear that prices may reverse at any time.
While before that, exporters 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 export is not much.
Vietnam’s pepper production is forecast to decrease by 20%. There are many rumors that the supply is in short supply because Vietnam accounts for nearly 60% of the world market share. How do you evaluate this problem?
Mr. Nguyen Tan Hien:The weather is cold this year, so pepper ripens a month later, so there is no stock after Tet. Export enterprises have not been able to buy goods. There are rumors that this year supply will be short of demand due to reduced output.
However, overall supply is still higher than demand. The world’s current demand for pepper is about 500,000 tons, while the supply in 2021 plus inventories of the previous years is about 600,000 tons.
Orders are as usual, sometimes even less than last year because some customers still have inventory.
The price hike at the end of May last year was understandable because by 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 is reasonable for the price to bounce back after a long period of low level.
But right now, why is that happening? Recently, Vietnamese pepper prices in the range of 53,000 – 55,000 VND / kg are also relatively high. Anything increased must also have an abnormal roadmap.
Do you have any recommendations for pepper growers?
Mr. Nguyen Tan Hien: People should be cautious, should not be too greedy, but should harmonize with the interests of businesses because over 90% of Vietnam’s consumption is consumed through exports.
People do not expect the price of pepper to go up to 100,000 VND / kg, but miss the current golden opportunity. Naturally, pepper prices can go up to 70,000 – 80,000 VND / kg, but not at this stage, but will fall at the time when Vietnam has finished harvesting and lack of goods.
Meanwhile, at present, the average harvest per day is 4,000 – 5,000 tons. At the current rate, about 40 days to complete the harvest.
There are many sources of goods, not a shortage of pepper prices being pushed up too hot, one day even the price can increase to 4,000-5,000 VND / kg / day.
That is an unstable, unsustainable sign. The current price increase, people still benefit but need to balance the benefits of exporting enterprises.
How does the failure to export products affect Vietnam’s pepper export market share in the world?
Mr. Nguyen Tan Hien: If Vietnamese enterprises cannot export products, rival countries like Brazil will take advantage of the opportunity to sell. This leads to Vietnam losing customers. In fact, the pepper industry has had a similar lesson from last year’s price hike.
When the customer has enough stock, the demand will plummet and the world pepper price will also plunge. Meanwhile, the Vietnamese pepper industry has lost the opportunity.
Source Vietnambiz