The item known as “Black Gold” of Vietnam is famous in the world. However, domestic enterprises still have to import large quantities for one reason.
According to the latest report of the Vietnam Pepper and Spice Association (VPSA), in the first 7 months of 2024, Vietnam exported nearly 164,400 tons of pepper of all kinds, with a turnover of nearly 765 million USD, down 2.2% in volume but up 40.8% in value over the same period in 2023. Many countries in the world import a lot of pepper from Vietnam such as the US, Germany, India, UAE, China…
Why do Vietnamese businesses have to import a lot of pepper?
According to VPSA, the average export price of Vietnam’s black pepper in the past 7 months reached 4,568 USD/ton, up 32.7% and white pepper reached 6,195 USD/ton, up 25% over the same period in 2023.
Despite being the country with the world’s top pepper production and export, in the first 7 months of 2024, domestic enterprises spent 80.4 million USD to import nearly 19,600 tons of pepper (including 17,443 tons of black pepper and 2,414 tons of white pepper), an increase of 15% in volume over the same period in 2023.
According to data from the General Department of Customs, Vietnam imports a lot of pepper from countries such as Cambodia, Indonesia and Brazil. Pepper from these three countries alone accounted for 92% of our country’s total import turnover in the first 7 months of 2024.
So, the question is why do Vietnamese businesses have to import a lot of pepper while our country is the top 1 in production and export of this item?
Why do Vietnamese businesses have to import a lot of pepper?
The global pepper market is worth about 5.4 billion USD and is forecast to grow at an average rate of 20% during the period 2024 – 2032. According to VPSA, Vietnam’s pepper output accounts for 40% and exports account for 60% of the world market share.
However, domestic enterprises have to import pepper for very practical reasons. Specifically, because the price of pepper was very low in the past, many farmers have switched to other crops. Moreover, pepper output has also decreased sharply due to unfavorable weather conditions. VPSA admitted that due to the prolonged drought, our country’s pepper output this year has decreased by 10% and is down to about 170,000 tons compared to 2023.
Therefore, Vietnamese enterprises must promote the import of pepper from countries such as Brazil, Cambodia and Indonesia… to serve production and consolidate the top 1 position in the world in pepper production and export for over 20 years.
According to experts, the sharp decrease in supply from Vietnam has had a major impact on global pepper prices. In the second quarter of 2024, domestic black pepper prices increased by 93% compared to the beginning of the year and increased by 2.3 times compared to the same period in 2023. Pepper prices continued to increase in July due to increased demand while supply was limited.
Due to the strong increase in demand from markets around the world, Vietnamese businesses still have to import a large amount of pepper to carry out production as well as meet the requirements of orders.
According to experts, due to the shortage of supply compared to global demand, at the same time, the cost of transporting goods is increasing rapidly and port congestion in Asia is affecting prices in import markets and causing prices to increase in the medium and long term.
By the end of 2023, Vietnam had exported 264,094 tons of pepper of all kinds (including 236,148 tons of black pepper and 27,946 tons of white pepper), with a total turnover of 906.5 million USD, down 8% compared to 2022. In 2023, the US was Vietnam’s largest market, accounting for 23.5% of the total pepper export value. Meanwhile, other major markets were China (14.1%), India (5.4%) and Germany (4.3%), respectively.
According to Minh Hang (CafeBiz)
