The quiet trade caused pepper exports in January 2020 to drop sharply in both volume and value. The oversupply is expected to continue, putting pressure on pepper prices. The long-term solution, this billion-dollar industry needs to step up processing, towards organic products.
Read more: >> Vietnam: Pepper exports in January 2020 increased slightly, but volume decreased sharply
Growing organic pepper in Mang Yang – Gia Lai
Exports fell sharply in both volume and value
According to statistics from the General Department of Customs, pepper exports in January 2020 reached 14.6 thousand tons, worth 35.85 million USD, down 11.6% in volume and 10.6% in value. compared to December 2019, compared to January 2019, a decrease of 23.9% in volume and a decrease of 36.8% in value.
In January 2020, pepper exports to many markets decreased compared to January 2019, such as the United States, India, the United Arab Emirates, Thailand, South Korea, and the United Kingdom. On the contrary, exports to markets increased, such as: Pakistan, Myanmar, Saudi Arabia.
Regarding pepper prices, the Import-Export Department (Ministry of Industry and Trade) informed that the average export price of pepper in January 2020 reached $2,443 per 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, the prices of black pepper and white pepper fell sharply.
Specifically, in the first 13 days of February 2020, the domestic price of black pepper decreased compared to January 2020. On February 14, 2020, the price of black pepper decreased from 6.2-7.7% compared to January 31, 2020, compared to January 14, 2020, decreased from 6.3 – 8.3%. The price of white pepper was at 58,000 VND/kg, down 4.9% compared to the end of January 2020 and sharply down compared to 73,000 VND/kg in the same period in 2019.
Vietnam’s pepper exports are affected by the temporary closure of land border gates by China to control the Covid-19 epidemic. Calculation from statistics of the General Department of Customs shows that Vietnam exports pepper to China mainly through the border gates of Lao Cai and Thanh Thuy (Ha Giang), accounting for 55.9% and 31 respectively. 8% of total exports.
Besides the impact of the Covid-19 epidemic, Mr. Hoang Phuoc Binh – Standing Vice Chairman of General Secretary of Chu Se Pepper Association – said that the source was due to the imbalance of supply – 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 only increased at the rate of 2-2.5%/year.
Vietnam’s annual pepper output is about 170,000 tons, of which export accounts for nearly 95%, domestic consumption is about 5%. Processed pepper products mainly include: black pepper, white pepper, ground pepper; In addition, there are products with small quantity such as: red pepper, green pepper, red pepper in brine, etc. However, the structure of processed pepper products is not reasonable, and white pepper is valuable. high growth only accounts for 10-15% of total output.
Vietnamese pepper is still mainly exported raw, always competing by price in the low segment. According to the report of the Ministry of Agriculture and Rural Development, the pepper industry has 18 industrial-scale processing factories, with a total capacity of about 70,000 – 80,000 tons/year; in which there are 14 factories with quite modern technology, processed products meeting international standards: ESA, ASTA… The average design capacity utilization rate 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 pesticide residues, mold infection, and Salmonella SPP bacteria.
Oversupply is expected to continue, putting pressure on prices
Quiet transactions caused pepper prices in January 2020 to drop sharply. Currently, Vietnam’s pepper has started the main harvest, so the price may continue to decrease in the near future. However, the level of impact in the first 2 months of 2020 is not strong because tracking statistics shows that pepper exports to the Chinese market usually increase sharply from March to July every year.
According to the International Pepper Association (IPC), Vietnam is the largest pepper producer globally in 2019. In which, the output of black pepper reaches about 175,000 tons, white pepper reaches 25,000 tons. Compared to 2018, Vietnam’s pepper production decreased slightly due to the shrinking planting area. In 2020, the oversupply is expected to continue, putting pressure on pepper prices. The reason is that, in 2020, the pepper growing area from 2016 to 2017 in major producing countries is time to harvest with high output.
It is forecasted that global pepper prices will remain low in the first 6 months of 2020. However, by the end of 2020, pepper prices may recover when supply – demand returns to balance, many businesses increase their purchases. store. In addition, the increased quality of pepper and increased labor costs will also contribute to the price of pepper.
Experts recommend that Vietnam begins to focus on improving pepper quality, reducing chemical use and developing organic pepper production. In the context of the complicated developments of the Covid-19 epidemic, to limit the impact of the Covid-19 epidemic on the pepper industry, businesses need to change the form of delivery and delivery, and promote exports by sea. , or intermodal rail.
In order to solve the problem of supply-demand imbalance in pepper production and export, a representative of the Import-Export Department said that the development of a sustainable pepper supply chain, building a link foundation to improve the value chain , processing and exporting pepper in association with raw material areas is the key issue. In addition, it is necessary to promote production according to organic processes, creating new clean products that can compete with Brazilian and Indian pepper… raising the percentage of white pepper for export to 30-40%, powdered pepper to 20% by next year. year 2030; diversifying products to meet the market with high quality requirements such as: organic pepper products, red pepper, ground pepper, pepper plastic…
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