Continuously decreasing in the past time, pepper price is now at a level equal to production cost and is likely to decrease further.
A pepper garden in Long Khanh (Dong Nai)
The export price of pepper also dropped sharply, greatly affecting the pepper export turnover and it is likely that this year it will not reach the 1 billion USD mark like a few years ago.
According to Mr. Hoang Phuoc Binh, PCT of Chu Se Pepper Association (Gia Lai), earlier this week, the price of pepper in Chu Se area was only 48,000 – 49,000 VND/kg. Thus, the price of pepper in Chu Se is now equal to the production cost.
Information from the Ministry of Industry and Trade, said that the price of pepper has also dropped below the mark of 50,000 VND/kg in many other localities. On August 6, pepper prices in Ea H’leo (Dak Lak), Gia Nghia (Dak Nong) and Dong Nai were all at 49,000 VND/kg; pepper price in Binh Phuoc is 50,000 VND/kg; in Ba Ria – Vung Tau is 51,000 VND/kg.
According to some information in the pepper industry, the price of black pepper has continuously decreased in recent years, due to the fact that pepper from Indonesia is imported a lot to Vietnam because of the lower price of the bucket. In 2017, Indonesia exported 42,700 tons of pepper, 40% of which was exported to Vietnam.
The global oversupply situation continues when Indonesia, Malaysia, Sri Lanka … have almost completed the harvest or are in the process of harvesting, also putting pressure on the price of pepper in the world market. That includes Vietnam’s export pepper. The export price of 550g/l black pepper is currently only about 2,600 USD/ton, 500 g/l grade is 2,450 USD/ton. The sharp drop in the offering price of black pepper for export also affected the domestic pepper price.
Meanwhile, although the transaction was not active, in the pepper market, there were still buyers and sellers. Statistics of the General Department of Customs show that the export of pepper is still quite stable. From the beginning of the year to mid-July, the amount of pepper exported was 142,348 tons, a slight increase over the same period last year (up 5.38% in volume) over the same period last year.
The price of pepper falling below 50,000 VND/kg in many key pepper growing areas is causing great concern for the whole pepper industry. Because when the milestone of 50,000 VND has been lost, the risk of pepper prices falling further is quite possible, when the output of the next crop is likely to be very abundant due to the good season and the pepper growing area is still quite large.
Mr. Hoang Phuoc Binh said, in 31 years of growing pepper, he has never seen a pilot blossom like this year. If the next 1-2 months, the weather continues to be favorable, the possibility that the 2018/2019 pepper crop will hit the season is very large. Besides, although in the past time, many pepper areas died of disease or were converted to other crops, but many farmers continued to grow pepper (new planting in many areas almost stopped at the end of the year). in the 2017/2018 season when pepper prices had dropped too much). Therefore, the total area of pepper has not actually decreased much. If the season is right, the output of pepper is still too large to be avoided.
Therefore, in the coming months, pepper price is not only very unlikely to recover, but also has the risk of continuing to drop sharply. Now that the pepper price is equal to the cost, if it drops further, surely all pepper growers will lose.
The sharp drop in domestic and export prices also had a great impact on the export turnover of the pepper industry. In the first 6 months of this year, the export price of pepper products only averaged 3,430 USD/ton, down 39.4% over the same period in 2017. Therefore, although the export volume of pepper increased by 5.2%, the value changed. decreased up to 36.5% and reached only 452.64 million USD. It is likely that after 4 consecutive years, the export value of pepper is always over 1 billion USD (from 2014 to 2018), this year, the pepper export value will again fall below the 1 billion USD mark.
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