Pepper export turnover in the first 6 months decreased by 36.2% over the same period last year, the main reason is due to lower export prices. The fall in export prices of pepper dragged down domestic pepper prices.
In the first 6 months of the year, pepper prices were in a downward trend due to plentiful supply and export market showing no signs of prosperity.
On Friday (June 15), the price of black pepper in raw material areas suddenly dropped sharply. In Ba Ria – Vung Tau, the most competitive locality, pepper prices have decreased by 2,000 VND / kg, down to 57,000 VND / kg. The remaining material areas also decreased and fluctuated in the range of 54,000 – 56,000 VND / kg.
Pepper prices continued to sink deeply in the decline, although prices increased slightly by 500-1,000 VND / kg depending on localities, but still remained at an unprecedented low level as at present.
While in Ba Ria – Vung Tau, the price of pepper decreased to 57,000 VND / kg, while in the remaining raw materials, the price fluctuated between 54,000-56,000 VND / kg. As of July 9, 2018, pepper prices in Ba Ria – Vung Tau and Dong Nai reached VND 54,000 / kg and VND 52,000 / kg on July 9. In Gia Lai and Binh Phuoc, it was 51,500 VND / kg and 53,000 VND / kg, respectively.
In general, in the first 6 months of the year, pepper prices tended to decrease due to plentiful supply and export market yet to show signs of prosperity. According to the Ministry of Agriculture and Rural Development, in the first 6 months of 2018, pepper export was estimated at 132 thousand tons and 453 million USD, up 5.1% in volume but down 36.2% in value over the same period. 2017. The average export pepper price in the first 5 months of 2018 reached US $ 3,477 / ton, down 40.8% over the same period in 2017 and down nearly 52% over the same period in 2014.
The year 2014 is considered to be the golden year of the pepper industry, because this year pepper export turnover for the first time reached the mark of 1 billion USD, and it was also this year that the pepper selling price of farmers reached 200,000 VND / kg. According to the Vietnam Pepper Association (VPA), this is the highest price ever. At this selling price, pepper growers have a 70% profit.
But by June 2017, pepper prices plummeted to only 70,000 – 75,000 VND / kg. Facing this situation, VPA urged farmers to temporarily stop selling, thus, pepper prices showed signs of rebounding around 80,000 VND / kg.
Total world pepper demand is about 300,000-350,000 tons / year, Vietnam can meet 200,000 tons / year, accounting for about 62% of the total global pepper output, the rest belongs to countries. Currently up to 95% of pepper production in Vietnam is used for export.
Thus, Vietnam is the leading producer and exporter of pepper in the world in terms of both size and output. The largest pepper export markets of Vietnam in the first 5 months of 2018 were the United States, India, Pakistan and Germany with 37.8% market share.
According to the Ministry of Agriculture and Rural Development, in the first 6 months of the year, pepper output was estimated at 268.1 thousand tons, an increase of 6.0% compared to 2017.
In the opinion of experts, any commodity is the same, when the market is always in a state of oversupply, the price will decrease, and pepper is no exception. Once Vietnam’s pepper production is too large, the price must fall.
However, falling close to production costs is unacceptable, because currently Vietnamese pepper accounts for nearly 60% of global pepper output as long as Vietnam stops selling for a short time, the price of pepper. the domestic market will immediately rebound.
“Holding a large supply in hand is like holding a two-edged knife, if you do not regulate and dominate the market, you will have to pay the price due to selling pressure. To solve this problem, there are two ways: stop selling when the price drops and resolutely reduce the pepper planting area at a reasonable level so that you hope to revive the price of pepper in the country.
However, it is worth mentioning that some businesses have signed contracts to sell in advance for the whole year at low prices, so they need the price down to buy, ”this expert recommended.
There is one thing to note, the current production cost of pepper is fluctuating around 50,000 VND / kg, but there are a number of businesses that have signed contracts to sell before this year the price below cost. Therefore, in 2019, it is very likely that pepper prices will drop below VND 50,000 / kg.
According to the VnEconomy
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