With pepper production expected to plummet and a series of free trade agreements signed including EVFTA, the pepper industry is expected to gradually recover from next year.
2020 is a turbulent year for the Vietnamese pepper market. During the past 4 years, pepper prices have continuously decreased.
From being considered as black gold of people in the Central Highlands and some Southeast provinces, now it becomes an economic burden of many families.
Remember in 2015, when pepper prices sometimes reached more than 200,000 VND / kg, many families “changed their lives”. However, up to now, the pepper price is only 1/4, people have to deal with bank debts. Meanwhile, the cost per kg of pepper is about 50,000 VND / kg.
That is the result of people rushing to grow pepper, making the area up to 3 times higher than planned. Specifically, according to the development plan of Vietnam’s pepper industry, by 2020, the area will be stable at 50,000 ha.
However, the actual area has increased to 152,000 hectares (as of 2019).
In the first months of 2020, the market situation is still nitrogenous when there is a time when the pepper price is only about 36,000 VND / kg, much lower than the production cost.
However, a big change happened to the market at the end of May when pepper prices suddenly soared to more than 60,000 VND / kg, nearly twice as high as at the beginning of the year.
This is considered a strange phenomenon when the fact that the world demand, which is already very low, is now affected by the COVID-19 epidemic, even lower because a series of restaurants around the world have to close.
Meanwhile, the world supply is still redundant, mainly from Vietnam – a country that accounts for 60% of the world market share (according to data from the Ministry of Industry and Trade).
Supply increased put pressure on pepper prices. (Photo: Government Newspaper)
These price increases are good news for farmers, but in fact it is just a temporary “pain reliever” dose because according to experts in the market, this is just a virtual price wave.
Talking to the writer, Mr. Nguyen Tan Hien, Deputy General Director of Tran Chau Import Export Trading Service Joint Stock Company, and Vice President of Vietnam Pepper Association (VPA), said that the market is currently disturbing information about raw materials.
Accordingly, some agents are hoarding goods to push prices up to make a profit by spreading rumors that pepper prices may rise to 70,000 – 80,000 VND / kg due to strong import demand in markets.
This leads farmers to not want to sell because they wait for higher prices, making it difficult for exporters to buy goods.
“The price increases, but people do not benefit because overseas customers just want to buy at the old price, but the new price they do not accept”, Mr. Hien said.
According to Mr. Phan Minh Thong, Chairman of Phuc Sinh Joint Stock Company, who is known as the “king” in exporting major information consumption, his business also has difficulty when demand in the world is low, not currently. increased strongly as market rumor.
“A lot of customers who bought from us want to sell back to the company. Some customers even want to postpone delivery to get through the difficult period. By the present. Their customer segments are hotel restaurants that are closed, ”Thong said.
Also because the actual demand in the world is still low, the uptrend lasted only one week. Entering June, pepper prices dropped to more than 52,000 VND / kg and in August decreased to more than 44,000 VND / kg.
New signals for 2021 are flourishing
According to Nguyen Nam Hai, VPA Chairman, the farmers’ lack of investment and care due to the sharp decline in pepper prices in recent years, along with the climate change, has made forecasts for productivity and pepper output. the whole year will fall sharply in 2021.
This helps the supply, which is already in surplus, shrinks and pushes up pepper prices.
Assessing the prospect of pepper price in the coming time, Mr. Dinh Xuan Thu, member of VPA said that farmers have identified that pepper output is decreasing in the coming time because many people are not interested in pepper cultivation and pepper acreage. significantly died across the country.
Although the price increase from 40,000 VND / kg to 55,000 VND / kg took place in the last few days of May due to speculation, farmers now have great confidence in the price increase of pepper in the upcoming 2021 crop.
Therefore, the holding and hoarding of goods can take place right in the beginning of the purchase in 2021.
Psychology at the beginning of the season, pepper prices will decrease, causing import-export companies with good economic potential to increase buying and stockpiling, which will create more competitive pressure on the market.
Finally, he assumes that pepper prices will increase at the beginning of the crop in 2021 and will fluctuate from April 2021 to the end of 2021 (can fluctuate at VND 60,000-70,000 / kg).
In fact, in the last months of the year, pepper prices showed signs of rebound to about 57,000 VND / kg. At this price point, people are already making a profit.
Price movements of pepper in the second half of 2020. (Photo: Duc Quynh summarizes data tintaynguyen.com)
The Import and Export Department (Ministry of Industry and Trade) forecasts that pepper prices will increase in the coming time due to lower output in some major producing countries. Many pepper growing areas of Vietnam have been affected by the storm, while the inventory is not much.
According to the Ministry of Agriculture and Rural Development, the disease COVID-19 in some countries importing goods (pepper, coffee) of Vietnam has been somewhat controlled.
Activities of services, tourism and restaurants reopened, contributing to increasing consumption of pepper.
The Ministry recommends Vietnamese enterprises to research and process, increase value-added for pepper products, limit raw exports, learn from India’s experience in spice industry development and food processing technology. .
In addition, with a series of free trade agreements signed in 2020, including EVFTA, the pepper industry is expected to openly to major markets.
With the EVFTA Free Trade Agreement, many advantageous agricultural products of Dong Nai will enjoy 0% tax rates such as coffee, pepper, honey … when entering the European market. In particular, clean pepper has taken steady steps to wait for the opportunity.
However, the Import and Export Department also noted that joining the EVFTA Free Trade Agreement is placing our country’s pepper industry in the face of new opportunities and challenges. In particular, the issue of technical barriers and food hygiene and safety should be focused.
According to VietnamBiz
