Export dropped sharply both in volume and value
According to statistics from the General Department of Customs, pepper exports in January 2020 reached 14.6 thousand tons, valued at US $ 35.85 million, down 11.6% in volume and 10.6% in value. Compared to December 2019, compared to January 2019, the price decreased by 23.9% and decreased by 36.8% in value.
In January 2020, pepper exports to many markets decreased compared to January 2019, such as the United States, India, United Arab Emirates, Thailand, South Korea and the United Kingdom. In contrast, exports to the market increased, such as Pakistan, Myanmar, Saudi Arabia.
Regarding pepper prices, the Department of Import and Export (Ministry of Industry and Trade) informed that the average export price of pepper in January 2020 reached US $ 2,443 / ton, up 1.1% compared to December 2019, but down 17 % compared to January 2019. In the first 2 weeks of February 2020, in Vietnam, prices of black and white pepper decreased significantly.
Specifically, in the first 13 days of February 2020, domestic black pepper prices decreased compared to January 2020. On February 14, 2020, black pepper prices decreased from 6.2-7.7% compared to January 31, 2020, compared to January 14, 2020 decreased from 6.3 to 8.3%. The price of white pepper at 58,000 VND / kg, down 4.9% compared to the end of January 2020 and sharply decreasing compared to 73,000 VND / kg in the same period in 2019.
Vietnam's pepper exports were affected by the Chinese side temporarily closing the land border gates to control Covid-19 epidemic. Calculations from the General Department of Customs statistics show that Vietnam exports pepper to China mainly through Lao Cai and Thanh Thuy (Ha Giang) border gates, accounting for 55.9% and 31 respectively, 8% of total exports.
Besides the impact of the Covid-19 epidemic, Mr. Hoang Phuoc Binh – Permanent Vice Chairman of the General Secretary of Chu Se Pepper Pepper Association, said that the source of the attack was due to an imbalance between supply and demand. When the supply of area, productivity, and output of both Vietnam and the world has increased in recent years, the demand for pepper has increased only by 2 – 2.5% / year.
Annual pepper output of Vietnam is about 270,000 tons, of which export accounts for nearly 95%, domestic consumption is about 5%. Mainly processed pepper products include: Black pepper, white pepper, powdered pepper; There are also products with small quantities such as red pepper, green pepper, red pepper in brine, … However, the structure of processed pepper products is not reasonable, white pepper (skull target) is valuable. High increase only accounts for 10-15% of total production.
Vietnam pepper is still mainly exported, always competing with prices in the low segment. According to the report of the Ministry of Agriculture and Rural Development, the pepper industry has 18 processing plants with industrial scale, total capacity of about 70,000 – 80,000 tons / year; including 14 factories with fairly modern technology, processed products that meet international standards: ESA, ASTA … The rate of using the average design capacity is 56.4%. Industrial processing accounts for about 65% of output.
Regarding product quality and food safety, Vietnamese pepper has been warned by some markets about food safety and residues of plant protection drugs, mold and fungi, and Salmonella SPP.
Surplus is expected to continue, putting pressure on prices
The quiet transaction made the price of pepper in January 2020 significantly reduced. At the moment, Vietnam's pepper has begun to be the main harvest, so prices may continue to decline in the near future. However, the impact level in the first 2 months of 2020 is not strong because monitoring statistics show that pepper export to China market often increases sharply from March to July every year.
Forecast, global pepper price will remain at low level in the first 6 months of 2020. However, by the end of 2020, pepper price may recover when supply – demand returns to the equilibrium, many businesses increase their purchasing power. store. In addition, increased quality of pepper and increased labor costs will also contribute to push pepper prices.
Experts recommend that Vietnam start focusing on improving the quality of pepper, reducing chemical use and developing organic pepper production. In the context of the complicated development of the Covid 19 epidemic, in order to limit the impact from the Covid 19 epidemic to the pepper industry, enterprises need to change the form of delivery and receipt of goods, boosting export by sea , or railway.
To solve the problem of supply-demand imbalance in pepper production and export, the representative of the Import-Export Department said that the development of sustainable pepper supply chains, building a linkage platform to enhance the value chain. Processing, exporting pepper in association with raw material areas is crucial. Besides, it is necessary to promote production under the organic process, create a new clean product that is strong enough to compete with Brazil and India pepper … raising the proportion of white pepper for export to 30-40%, pepper powder for 20% in in 2030; diversify products to meet the market of high quality requirements such as organic pepper, red pepper, ground pepper, pepper plastic …
