Today the price of pepper increased to 144,000 VND per kg, an increase of 112% over the same period last year and the highest level in the past 9 years.
On the spice forum, consumers and businesses were surprised because the price of pepper increased rapidly, surpassing coffee and cocoa. Many businesses say “pepper prices increase faster than gold”
Mr. Phan Minh Thong – Chairman of Phuc Sinh Group said that pepper prices have increased but many businesses cannot buy goods because farmers are stockpiling and waiting for prices to increase. This is putting pressure on some businesses to collect enough goods for their partners.
Similarly, a business specializing in exporting spices to the US and EU said that they are producing moderately and the raw materials stored in warehouses are almost exhausted and are considering importing in sufficient quantities because pepper prices are increasing too quickly.
“If at the beginning of the year it was only 77,000 VND per kg, now pepper has increased by 67,000 VND. From the third quarter onwards, we must sign a new price contract, otherwise we will lose money,” said the director of this business.
Pepper at the garden in the Central Highlands: Photo: Character provided
According to businesses, pepper prices will continue to increase and may repeat the historic peak in 2015. The reason is that pepper inventories in main producing countries such as Vietnam, India and Brazil are low due to low demand. Consumption demand has been high in recent times.
Mr. Thong said that pepper trees are difficult to grow and care for. If they are not watered periodically and cared for regularly, they will easily die. The crisis in 2015 caused many people to neglect the pepper industry. By the end of 2023, the national pepper output will reach about 170,000 tons and in 2024 it will decrease to about 160,000 tons, which is a sharp decrease compared to the peak of 300,000 tons in 2015.
Sharing the same opinion, Ms. Hoang Thi Lien – President of the Vietnam Pepper and Spice Association (VPSA) said that supply and demand is the main reason for the rapid increase in pepper prices. Vietnam, Indonesia and Brazil are all forecast to reduce crop output because of the impact of El Nino. Meanwhile, in addition to the US, the markets of Pakistan, Germany, South Korea, and India have high demand for reserves.
In addition, commodity trading by speculators has recently increased. It is possible that they have been hoarding goods and creating artificial scarcity. Mr. Thong said that people should be careful and sell at the right time. Because pepper prices may repeat the scenario of 2015, rising to a peak and continuously plummeting to the price of 35,000 VND per kilogram in 2019.
According to a report from the Ministry of Agriculture and Rural Development, in May, the average export price of pepper reached 4,308 USD per ton, an increase of 39.3% over the same period last year. Pepper, along with rice and coffee, are the items with the highest export prices.
Vietnam’s pepper industry accounts for 40% of output and 60% of the world market share. According to VPSA, the global pepper market size is worth about 5.4 billion USD and is forecast to reach an average growth rate of about 20% in the period 2024-2032.
By the end of 2023, the US is Vietnam’s largest customer, accounting for 23.5% of the total export value of this product. Ranked second is China, accounting for 14.1%; followed by India and Germany accounting for 5.4% and 4.3% of the total pepper export value, respectively.
According to VnExpress.net
