Also in the group of “billion-dollar” exports and in the position of “dominating” the world market in terms of output, the pepper industry is facing the risk of oversupply due to spontaneous increase in area.
Read more: >> Pepper industry: When the leader has no “real talent”
>> Reducing area for sustainable pepper development
When “dominating” output is also difficult
It is undeniable that the development of Vietnam’s pepper industry over the past time has been quite impressive, with the change in the skin of many rural areas thanks to pepper cultivation. However, it seems that the overheated development in terms of area (increased 3 times only from 2010-2017), but lack of attention and necessary investment for product quality … is causing both businesses (DN) and people to Pepper cultivation faces many risks.
Particularly in Ba Ria-Vung Tau, a report at a recent pepper industry conference showed that the pepper growing area in the whole province was nearly twice as large as planned. According to the plan, by 2020, the province will have about 7,000 hectares of pepper, but estimates show that the pepper growing area may reach 13,200 hectares within the next 2 years.
Indeed, Vietnam’s pepper area in 2017 was 152,000 hectares, an increase of 22.5% compared to 2016. In many other pepper growing regions around the world, the same phenomenon happened. The balance was tilted to the demand side, causing the price of pepper in 2017 to drop sharply from about 200,000 VND/kg to more than 60,000 VND/kg.
The record price shock caused Vietnam’s pepper exports to increase by 20% in volume, but the turnover decreased by 22%.
According to the General Department of Customs, in the first quarter of 2018, the whole country exported more than 60,000 tons of pepper of all kinds with a turnover of more than 222 million USD. Compared to the same period in 2017, export volume increased by 18%, but the turnover decreased by 31% due to the sharp decline in pepper prices over the past year.
Fortunately, the forecast of the International Pepper Association (IPC) said that although it is difficult for pepper prices to recover this year, it will not fall as sharply as in 2017 because many countries no longer see great economic benefits from pepper. At the current price, it is not advisable to invest and develop.
In 2018, Vietnam will still maintain the leading position in the world in terms of export pepper output, equivalent to 2017, with about 180,000-200,000 tons. The estimate of turnover is still an open unknown…
The forecast for this year’s situation for pepper farmers and producers is more optimistic than last year’s, but according to enterprises and general analysis of the Vietnam Pepper Association (VPA), a record price shock of 2017 are early warning signs that a spontaneous manufacturing industry has really reached the threshold of risk when supply exceeds demand. And most of all, pepper is a condiment, not an essential consumer item or food, so the “rescue” of agricultural products will be difficult to promote as effectively as with many other commodities before…
The risk of “losing cows”, having to worry about “making a barn”
According to the Ba Ria-Vung Tau Pepper Association, the link between the government, people and businesses is not close, leading to spontaneous development of pepper growing areas; There is no clear commercial promotion for pepper, intellectual property rights on the geographical indications of pepper in Ba Ria-Vung Tau have not been exploited yet, and have not been attached to the national pepper brand. … Along with that, the price dropped sharply, causing farmers to switch to hoarding goods to wait for the price to rise. The purchasing work of many enterprises is therefore difficult.
But the “light at the end of the tunnel” has appeared when the pepper areas that are closely linked with farmers, have international quality certification, meet the requirements of exporting to fastidious markets that are gradually forming. Although it only accounts for about 10% of the total area of pepper in the province, it is clear that both businesses and a part of farmers are more aware than ever when it is time to change farming practices and quit the race. growth in area and output.
Ms. Tran Phuoc Hau, Assistant General Director of Tran Chau Import-Export Trading Service Joint Stock Company, said that in the past year, this enterprise has been constantly pressured by buyers, technical barriers in major markets of Vietnam pepper. also raised. Part of the reason for the difficulty of pepper exports lies in the risk of oversupply. “In order to focus on improving the quality of pepper, since 2017, we have built a sustainable pepper production plan and found new markets in Eastern Europe,” shared Ms. Hau.
In that shift, it seems that FDI enterprises have been one step faster. Willem Van Walt Meijer, General Director of Nedspice Spices Processing Co., Ltd (Netherlands), said: Having cooperated with 1,600 farmers in Binh Phuoc for nearly 7 years, the first goal is to ensure product origin can be traced to each household. Where there are no quality products, enterprises will have an agricultural extension team to assist in adjusting the cultivation, harvesting and preservation processes; There is even a policy to reward farmers with good products.
“The only solution for Vietnamese pepper at the moment is to improve the quality. More and more Japanese customers come to us and are willing to pay high prices for their satisfactory products,” said Mr. Willem Van Walt Meijer.
Last year 2017 was also the year when the phenomenon of pesticide abuse on pepper was probably significantly reduced when importing countries never had to issue warnings about pesticide residues for pepper from Vietnam.
In addition to the low prices, farmers do not want to spend more on fertilizers and drugs, partly because pepper growers have better technical knowledge and better understanding of global market trends. upon integration.
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