The recommendations stemming from the situation of the Covid-19 epidemic will continue for a long time and are forecasted to have a great influence on the import and export activities of pepper enterprises.
According to the Vietnam Pepper Association (VPA), the strong measures taken to prevent Covid-19 in the past time have added more difficulties for businesses, because the procedures to implement “3 on the spot” and get a travel permit. In addition, enterprises have to bear the cost of testing and equipment for production staff to perform “3 on-site”.
Port congestion and lack of empty containers for a long time have created opportunities for shipping lines to manipulate surcharges and freight rates. Transport prices on routes increased 10 times from the end of 2020 to the present time and there is no sign of stopping. This has put many businesses on the brink of bankruptcy. However, in order to keep the market and reputation, businesses are forced to perform the contract with the estimated loss for each export order.
Pepper businesses are having to bear more costs due to the Covid-19 epidemic. Photo: TL.
In early August, the Vietnam Maritime Administration held an online seminar between industry associations and a number of shipping lines on the issue of increasing sea freight rates. The Vietnam Pepper Association has actively joined with other industry associations to send dispatches to ministries and agencies, etc. However, up to now, sea freight has not shown any signs of cooling down. To solve this problem, state agencies, especially the Ministry of Transport and the Maritime Administration, need to take stronger measures to limit the manipulation of freight rates and unreasonable increases in fees by airlines. ship.
The Vietnam Pepper Association also said that although the recent increase in pepper prices has brought much excitement to farmers, at the same time the cost of inputs is also showing signs of increasing. With the current price, the ability to invest in pepper gardens is still a difficult problem for households lacking financial resources. If farmers borrow for the purpose of reinvesting and expect fortune-telling in 3-4 years, the potential for risks is very high when market fluctuations and weather influences are difficult to predict.
Faced with this situation, the Vietnam Pepper Association has made 5 recommendations, specifically:
The firstThe Covid-19 epidemic will continue for a long time and is expected to have a great impact on the import and export activities of enterprises. From the circulation of goods to the restriction of issuing travel permits, export activities of enterprises have been halted. In the immediate future, the Government will soon have a mechanism to gradually open up to provinces and cities that have injected people with 1 dose and 2 doses of vaccine so that economic activities will gradually return to normal. In particular, priority is given to employees of enterprises operating in production and transportation to ensure the supply chain of goods.
Second, to support businesses and farmers, the Government needs to have a policy to reduce corporate income tax payable in 2021 and 6 months of 2022. Directing commercial banks and policy banks to reduce interest lending to businesses, simplifying loan procedures as well as increasing the limit for businesses, freezing debts, loosening debt repayments for businesses as well as farmers. Consider reducing the cost of electricity and water for businesses.
Despite difficulties, it is expected that in 2021, the pepper industry will still strive to bring in export turnover of 850 million USD (up 28% compared to 2020). Therefore, it is very necessary that the Government, ministries and branches pay attention to directing and supporting pepper businesses, in the context of the prolonged Covid-19 epidemic. Photo: TL.
Tuesday, providing financial support for enterprises participating in domestic and foreign trade promotion programs. Strengthen the promotion of Vietnam’s key products through Vietnam’s commercial representatives and Counselors abroad.
WednesdayFor the pepper industry, the Ministry of Agriculture and Rural Development should soon direct the Department of Crop production to make statistics on the area and output of pepper nationwide, so that businesses can have appropriate business plans and timely recommendations. , in the face of the situation that the area may increase and the risk of a crisis in the pepper industry is likely to recur when the price of pepper increases.
Thursday, requesting the Government and ministries and branches to soon issue a Circular guiding the implementation of Resolution No. 105/NQ-CP dated September 9, 2021 of the Government on supporting enterprises, cooperatives and business households in the context Covid-19 outbreak.
According to VPA, due to the effects of climate change in 2020 as well as pepper prices continuously falling too low from 2017-2020, people limit investment and care, which leads to Vietnam’s pepper production this year. 2021 will decrease by 25% compared to 2020. Pepper producing countries in the world such as Brazil, Indonesia, Malaysia, India, etc. will also reduce output in 2021 due to climate change.
In the first 8 months of 2021, Vietnam exported over 197,000 tons, with a turnover of 657.8 million USD, compared to the same period in 2020, the export volume decreased by 2% but the turnover increased by 48.3%.
The decrease in supply led to a sharp increase in export prices compared to the previous year. It is expected that for the whole year of 2021, Vietnam’s exports are estimated at 240,000 tons, with a turnover of 850 million USD, compared to 2020 the export volume will decrease by 15% but the turnover will increase by about 28%.
VPA also stated that the current supply is limited when pepper is grown only in a few countries such as Vietnam, Brazil, Indonesia, India, Cambodia, SriLanka, of which Vietnam contributes 40% of the global pepper output; In addition, global pepper production next year is estimated to decrease by about 4%. These will be the conditions that allow us to expect pepper prices to continue their uptrend in the near future.
According to NNVN
