In the first quarter of 2019, domestic pepper prices fluctuated in the downward trend with a decrease of 6,000 – 6,500 VND / kg. Pepper prices plummeted due to too much output, which led to oversupply. In the first week of April, pepper prices in the market continued to fall further from VND 500 – 1,000 / kg depending on where businesses and traders purchased them at VND 43,000 – 46,000 / kg and are still maintained at this level.
According to a report by the Ministry of Agriculture and Rural Development, the export of pepper in March 2019 is estimated at 36 thousand tons, with US $ 81 million, bringing the export of pepper in the first 3 months of 2019 is estimated at 72 thousand tons and 182 million. USD, up 19.3% in volume but down 17.7% in value over the same period in 2018.
In Q1 / 2019, pepper price decreased by VND 6,000 / kg
The average export price of pepper in the first 2 months of 2018 reached US $ 2,800 / ton, down 27.3% over the same period in 2018. The largest pepper export markets of Vietnam in the first 2 months of 2019, including: China States, India, Pakistan and United Arab Emirates with 42.7% market share.
In March, pepper price in most major markets in the world tended to increase slightly. But if considering the first 3 months of the year, the domestic price fluctuated in a downward trend with a decrease of 6,000 – 6,500 VND / kg.
Pepper market in the first week to April 6, in the raw material areas further reduced from 500 to 1,000 VND / kg depending on the place compared to the first session of the week. This week, businesses and traders buy pepper at 43,000 – 46,000 VND / kg, until today the price of pepper in the raw material areas remains at the above price.
In the face of falling prices, Binh Phuoc Provincial Party Committee Secretary Nguyen Van Loi had a meeting with departments and agencies in the province and pepper businesses in order to find more than 20,000 tons of pepper and harvest in the season. New in 2019 because the market is quite “precarious”.
Mr. Loi called on pepper exporters inside and outside the province to be interested in finding outlets for the consumption of this pepper locally, because the purchasing price is low, farmers are in trouble, while the whole The province's pepper volume is all clean products, eligible for export. However, official export is currently only one unit committed to purchase with less than 1/3 of the province's output.
In difficulties there is still a chance
Facing the situation that the pepper price in the market is low, a pepper industry expert said that we make a strategy for the pepper industry, if we are only too concerned about daily price fluctuation, there is no comprehensive view. Despite the price decrease, the export volume of pepper in the first quarter of 2019 increased by over 19%, indicating that the business has seized very good market opportunities.
Under the current price reduction situation if we keep the pepper growers from making losses, and ensure market stability while Vietnam is holding a high market share (60 – 65%), and in In the future, pepper prices may rise again.
Therefore, it is advisable to try to maintain and continue to enlarge the market when pepper prices are low and other exporting countries are facing difficulties in prices. As the country that holds most of the supply, if we try to keep prices high, other exporters will benefit.
“The problem is that in the context of falling prices and pepper Vietnam has a competitive advantage, we must try to keep market share, until the market price increases again it will be an opportunity of Vietnam and in We have done this very successfully in the past, like in 2001, when the world pepper market collapsed but Vietnamese pepper was still not losing, because we continued to expand the market, until the market increased prices. In return, Vietnam has occupied more than 60% of the world market share of pepper, “the expert said.
Now in the middle of the crop and in difficult conditions, farmers with pressure to sell money will have to sell even losses. But in fact every time Vietnam stops exporting, the price of pepper increases, even in March, sometimes the price has reached 47,000 VND / kg.
The cause of this price increase is because people stop selling, besides some customers need contracts to buy compulsory for delivery. Therefore, it is very important to regulate the market in the condition that pepper price is going down and the market is oversupply.
“The most important thing now is that if Vietnamese enterprises can keep the selling price below the cost price, it will be an opportunity for the sustainable development of the pepper industry in the future,” the expert recommended.
Although the price of pepper in the market is declining, it still has a positive factor, that is, the export volume of pepper in the first quarter grew to 19.3% over the same period. This is a signal that Vietnamese enterprises are still maintaining export markets.
Trading in a market mechanism, when the supply is redundant, of course, the price is reduced, and when the market is quiet, which business is calm, handles the situation well and waits for opportunities and art. Good business will overcome difficulties for sustainable development.
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