Rising domestic pepper prices push up export pepper prices. Experts expect the pepper industry to earn billions of dollars in export turnover this year.
According to the Ministry of Industry and Trade, from the end of April until now, pepper prices have continuously increased sharply and adjusted prices daily. Around mid-May 2024, pepper price was at 120,000 VND/kg, then by the end of May it had increased to 127,000 – 129,000 VND/kg. Updated as of June 5, pepper price nearly reached 150,000 VND/kg.
Ms. Hoang Thi Lien – President of the Vietnam Pepper and Spice Association (VPSA) said that the gap between supply and demand is the main cause of the rapid increase in pepper prices. Vietnam, Indonesia and Brazil are all forecast to reduce output this season because of the impact of El Nino. Meanwhile, the markets of Pakistan, Germany, Korea, and India have high demand for reserves.
In addition, many years ago, pepper prices continuously plummeted, causing many pepper-growing households to reduce their area by half. Many perennial gardens were cut down and planted with durian and a number of other plants with higher economic value, causing the source of water to grow. supply declines.
According to Mr. Hoang Phuoc Binh – Vice Chairman of Chu Se Pepper Association (Gia Lai), in May and the first days of June 2024, pepper prices continuously increased, even one price in the morning and another price in the afternoon.
Mr. Binh said that this year’s pepper output in Vietnam and many major producing countries is forecast to decline due to the impact of the El Nino phenomenon and the decline in cultivated area. On the other hand, in Vietnam, the amount of inventory transferred from last year to this year is insignificant.
In addition to the objective factors mentioned above, it is also possible that due to speculative activities, traders and investors have accumulated goods and created an artificial scarcity, pushing pepper prices up.
Ms. Hoang Thi Lien said that, with the current situation, global pepper production cannot meet consumer demand, so pepper prices will still tend to increase in the next 3-5 years.
According to the Import-Export Department (Ministry of Industry and Trade), in the world market, it is forecast that pepper prices will continue to increase in the near future, but the growth rate will slow down.
Therefore, the management agency recommends not to massively expand the planting area but to focus on investing and taking care of intensive farming so that pepper plants can grow sustainably and stably.
VPSA recommends that export businesses be careful in purchasing and exporting activities to avoid risks similar to recent coffee or rice prices.
According to the Vietnam Pepper and Spice Association, Vietnam’s pepper industry accounts for 40% of output and 60% of the world market share. The global pepper market size is worth about 5.4 billion USD and is forecast to achieve an average growth rate of about 20% between 2024 and 2032.
In May 2024, Vietnam exported 31,357 tons of pepper of all kinds with an export turnover of 141 million USD, the average export price of black pepper in May reached 4,542 USD/ton, white pepper reached 6,106 USD/ton. tons, an increase of 229 USD for black pepper and 63 USD for white pepper compared to the previous month.
Overall, in the first 5 months of the year, Vietnam exported 114,424 tons of pepper of all kinds with a total export turnover of 493.1 million USD. Compared to the same period in 2023, export volume decreased by 13.2%, but export turnover increased by 20.6%.
Currently, the US is Vietnam’s largest customer, accounting for 23.5% of the total export value of this product. Ranked second is China, accounting for 14.1%. Next are India and Germany, accounting for 5.4% and 4.3% of the total pepper export value, respectively.
In the first 5 months of 2024, the United States continues to be Vietnam’s largest pepper export market reaching 30,466 tons, accounting for 26.6% and increasing by 44.4% over the same period. Germany rose to become Vietnam’s second largest export market reaching 7,532 tons, accounting for 6.6% and increasing 103.2%.
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According to Hai Yen (Banking Times)
