Enhancing the competitiveness of Vietnamese pepper

Vietnam, Indonesia, India, Brazil, Malaysia and Sri Lanka are 5 countries that account for more than 95% of the world’s pepper exports, of which Vietnam accounts for 44% of the total export volume and ranks first in the world in terms of pepper exports. The largest pepper importer is the United States, accounting for about 24% of global pepper exports; second is Germany 10%; the next countries are the Netherlands, Singapore and the Arab bloc, each accounted for about 4-5% in 2010.

From production

Pepper It has been grown in Vietnam for over 200 years, but the area has only been expanded since 1990, especially after 1998 when pepper prices increased with an average growth rate of 11.7%/year and 6.2. %/year for the next 10 years. By the end of 2010, the planted area pepper in Vietnam reached about 51,000 ha, of which the harvested area accounted for 80%.

The largest pepper growing area is now concentrated in the Southeast provinces, mainly in the three provinces of Binh Phuoc, Ba Ria-Vung Tau and Dong Nai. The second concentrated area is the Central Highlands, distributed mainly in 3 provinces of Dak Nong, Dak Lak and Gia Lai. These are areas with land resources and climate suitable for pepper, with great potential to increase area and productivity.

Vietnam’s pepper productivity is much higher than the world average, the average yield is about 2.2 tons/ha, 4-5 tons/ha in many places, even higher, especially some areas in Gia Lai. Pepper production has increased significantly since 1998, from 15,000 tons until now to more than 110,000 tons, equal to more than a third of global pepper production. Since 2002, Vietnam has become the leading country in terms of output and the largest supplier of pepper in the world pepper market. Vietnam has 18 clean pepper processing plants, with a capacity of about 70,000 tons/year (2010), of which 14 have quite modern technology, processing pepper through steam, creating clean products reaching the highest standards. American (ASTA), European (ESA), Japanese (JSSA) standards.

Vietnam’s pepper productivity is leading in the world

In addition to clean black pepper products, white pepper processing (skull pepper) is increasingly focused with an increasing proportion of exports, accounting for 17-19% of Vietnam’s total export pepper output in the last 3 years. Since 2009, Vietnam’s skullcap exports have risen to the top and contributed to 50% of the world’s export of black pepper. Vietnamese pepper has a high quality of flavor (aromatic, spicy), not inferior to that of Indonesia and India. The pepper regions in Phu Quoc and the North Central region have the advantage of climate that helps pepper have firm seeds and characteristic flavor.

Vietnam has the important advantage of low labor costs, hard labor and many creative ideas that have built low-cost but high-yield orchards, allowing Vietnamese pepper to hold the upper hand in the market. market even as prices fall.

Go to the market

Export rate accounts for 95% of annual pepper production, bringing in foreign currency about 450-500 million USD/year (compared to 100 million USD/year 10 years ago). This is the combined result of increased productivity plus development of processing technology, white pepper products now account for 17-20% of total pepper exports today compared to 4% in the early 2000s.

Vietnamese pepper has reached 80 countries and territories around the world. Vietnam’s pepper import market is quite diverse. Before 2000, Vietnam exported pepper mainly to Asian countries, especially Singapore. Up to now, the Asian market is still developing, the European market has increased sharply, other markets such as the Americas, especially the United States (accounting for 15%) and African countries have increased significantly.

The price of black pepper fluctuated strongly from the 1970s, until the early 1990s increased steadily. Since 1998, when pepper production began to increase sharply, the price decreased, and then increased again in 2004 with a bumper season in Vietnam. The economic recession contributed to the decline in pepper prices in 2009 but recovered 1 year later to date. Currently, Vietnam’s prices are lower than that of some competitors such as Malaysia, India, and Thailand.

Tree pepper It is grown in 70 countries around the world with a total area of ​​476,514 hectares (IPC 2010). The distribution area is concentrated mainly in the equatorial countries. India and Indonesia account for nearly 70% of the area pepper Global. The world pepper yield is about 0.7 tons/ha and increases very slowly. Countries with very large areas such as India and Indonesia have the highest average annual yield of about 0.4 tons/ha. Thailand and Vietnam have a fairly high yield of about 2.2 tons/ha on average, but Thailand’s pepper output is not large. Total world pepper production only increased by an average of 0.6%/year in 10 years (2001-2010), in 2010 was 338.38 thousand tons.

Along with the growth of the pepper industry, Vietnam has gradually formed large pepper exporting companies. Out of nearly 200 enterprises purchasing, processing and exporting pepper at present (of which 13 are foreign enterprises), there are more than 70 enterprises involved in processing and exporting pepper directly, of which there are about 20 enterprises. export capacity of over 10 million USD/year.

Besides the development of businesses, Vietnam has successfully built the Chu Se pepper brand (Gia Lai), which has since shifted from exporting cheap raw goods to standard quality products. Chu Se pepper brand with high product quality, so far has been famous in the country and has been noticed by many countries and regions. Currently, the Vietnam Pepper Association (VPA) is continuing to promote the building of pepper brands for Ba Ria-Vung Tau, Phu Quoc, and Loc Ninh (Binh Phuoc).

The current demand for pepper is not only used in dishes, but also in the pharmaceutical field. Pepper oil is also used in other fields such as cosmetics, perfumery, personal hygiene products, such as toothpaste, mouthwash, etc.
Data from the International Pepper Commission (IPC) shows that in the 10 years since 2001 world pepper consumption has increased by about 3% per year. It is estimated that in the long term, the world will have a shortage of pepper supply of several tens of thousands of tons per year.

And the comparative advantage of Vietnamese pepper

In the situation that pepper prices remain high as in recent years, the competitiveness of pepper Vietnam is huge. This is evident when considering that the domestic resource cost (DRC) index has decreased from 0.7 in 2004 to 0.4 in 2010, a coefficient less than 1 indicates an increase in competitiveness. paintings of pepper Vietnam. The Revealed Comparative Advantage (RCA) of Vietnamese pepper is much larger than that of other pepper exporting countries in the world. Based on the data of the International Pepper Committee (IPC) and the Food and Agriculture Organization of the World (FAO), the coefficient of visible comparative advantage of Vietnamese pepper in 2010 is 84.6, more than 11 times RCA of Brazilian, Indian, Malaysian pepper, 3.9 times higher than Indonesian pepper.

Although it is a dominant export industry, bringing benefits to farmers, the Government does not have a protectionist policy. Nominal protection rate (NPR

The above analysis shows that the competitiveness of Vietnamese pepper in the world market is very high, when Vietnam’s trade market share is increasingly superior and world pepper prices are increasing. Many types of Vietnamese pepper have quite good quality such as Phu Quoc pepper with quality equivalent to Indonesian and Indian pepper, Chu Se pepper has the characteristics of gloss, large seeds, characteristic aroma, high density, and high density. reputation in the world market, including demanding markets such as the EU and the US. Pepper businesses have the ability to export directly to raw material suppliers for spice processing factories in other countries.

However, pepper production is mainly carried out by individual households, small scale, poor disease control ability. The epidemic is threatening the sustainable development of Vietnam’s pepper industry. The competitiveness of domestic pepper purchasing, processing and exporting enterprises is still weak in terms of capital, international trade experience and risk management. The world economic crisis, especially the European region and the US, can last long, which are the main export markets of Vietnamese pepper. Pepper businesses need to promote diversification of markets to minimize export market risks.

Follow: Hai Son (Electronic Gia Lai Newspaper)