Source: vietnambiz.vn
In the first 4 months of the year, Vietnam’s pepper exports to China increased sharply while other main markets declined.
Data from the Vietnam Pepper and Spices Association (VPSA) shows that China has surpassed the US to become the largest pepper export market of Vietnam in the first four months of this year with a volume of 35,914 tons, an increase of more than 15 times (1,430%) over the same period and far exceeding the 20,498 tons that Vietnam exported to this market in the whole of last year.
Data: VPSA (synthesized US)
In terms of proportion, China accounts for 35% of Vietnam’s total pepper export volume compared to a modest 3% in the 4 months of 2022.
In April alone, Vietnam’s pepper exports to China reached 9,995 tons, down 36.4% compared to the record 15,710 tons in March but increased 48 times (4,682%) compared to April 2022.
Data: VPSA (synthesized US)
After nearly 3 years of closure against the COVID-19 epidemic, China has accelerated import pepper in Vietnam since the beginning of this year after the country lifted strict disease control measures and reopened the economy. Besides, pepper price The decline during the fourth quarter of last year, which lasted until the beginning of this year, was also one of the factors that pushed the Chinese market to boost buying.
Meanwhile, the amount of pepper exported to some other large consuming markets declined sharply in the first 4 months of this year.
Data: VPSA (synthesized US)
The recovery of pepper exports to China is considered a save, offsetting the decline of other markets. Therefore, in the first 4 months of the year, pepper exports still grew by 32% over the same period last year to 24,929 tons.
China’s continued large purchases have pushed up pepper prices even though demand in other major markets such as the US and Europe remains weak. In addition, pepper growers, after selling a part to cover costs, kept their queues waiting for higher prices.
Accordingly, the domestic price of black pepper has increased sharply since the beginning of the year. Especially at the end of April, pepper prices had a “speed up” after moving sideways in March.
As of May 22, pepper prices in the Central Highlands provinces ranged from 74,000 to 75,000 VND/kg, an increase of 13-14% (8,500-9,500 VND/kg) compared to the end of the first quarter and up 25% (15,000 VND). /kg) compared to the beginning of this year.
United States of America
The average export price of pepper to the market also increased by 50% in the first 4 months of the year, reaching about 2,414 USD/ton.
Data: VPSA (synthesized US)
98% of pepper is exported to China by quota
For many years, Vietnam has been exporting pepper to China through unofficial channels, thus facing many risks.
According to Chinese Customs data, in the first quarter, Vietnam’s pepper exports to this country were only 472 tons, much different from VPSA’s data of about 26,000 tons.
Talking to the writer Mr. Le Viet Anh, VPSA’s Chief of Office said that the data of China Customs is imported pepper by official channels, while VPSA’s data includes both official and unofficial quotas. Thus, up to 98% of pepper exported to China is through informal quotas.
Recently, in the draft Decree 14/2018 on border trade, the Ministry of Industry and Trade proposed that from January 1, 2025, it would reduce the number of times of tax exemption and the amount of tax exemption for the import of goods in the form of: exchange residents in order to harmonize and synchronize with the change of policy for the export of goods in the form of resident exchange.
By January 1, 2028, all border gates and openings will only be allowed to carry out export procedures to China for goods that have entered China through international border gates or main border gates.
Mr. Viet Anh said that if put into practice, this Decree will benefit Vietnam’s pepper export activities. Currently, the export to China is mostly done by individuals, outside the association.
Under the current agreement, shipments under 8,000 yuan when imported into China will not be taxed. Therefore, Chinese traders take advantage of this policy to split shipments to avoid paying taxes. If the shipment is large, after paying tax, the price will be much higher than the official import.
“If this Decree is implemented soon, it will be good for the pepper and spice industry in particular. Chinese traders will no longer split shipments but have to buy official goods, competing with Vietnamese legitimate enterprises. At that time, businesses currently exporting officially will benefit. The purchase and sale also becomes more transparent, there is no more congestion at the border gate because customers suddenly stop buying and cancel the contract, “said Mr. Viet Anh.
However, the official export means that businesses will have to meet strict requirements from China because this is no longer an easy market as before.
Ms. Hoang Thi Lien, Chairwoman of VPSA said that businesses are also gradually switching to official export. To officially export to China, it is necessary to have a planting area code registered with the local agriculture department. At the same time, the growing area has obtained GAP certification (VietGAP, GlobalGAP, ASEANGAP) or equivalent certification recognized by Vietnam and internationally.
