Both of the two industries that once ranked No. 1 in the export market of agricultural products are pepper and cashew nuts are sharply decreasing in terms of export value. In the context that Vietnam has signed EVFTA (Vietnam – EU Free Trade Agreement), these two sectors must soon accelerate restructuring and promote clean production in order to maintain their position.
Losing position “No. 1”
According to a report of the Department of Agricultural Product Processing and Market Development, the export volume of pepper in August 2019 is estimated at 20,000 tons, with a value of US $ 50 million, bringing the estimated export volume of pepper in the first 8 months of 2019. reached 220,000 tons, equivalent to 561 million USD, up 27.4% in volume but down 3.8% in value over the same period in 2018.
The average export price of pepper in the first 7 months of 2019 reached 2,556 USD / ton, down 24.5% over the same period in 2018.
With clean production, pepper in Go Quao district (Kien Giang) is less affected by pests than before, pepper productivity also increases and costs are reduced. Photo: N.Q
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With cashew products, the Department of Processing and Agricultural Product Market Development said that in the near future, cashew kernel prices will not be able to increase much due to the increasing demand of the Western market but not the purchase. Cashew kernel and crude prices in the near future will be stable and likely to increase, but it is unlikely that the price will surge. |
Vietnam has had 18 years of holding the No. 1 position in the world in exporting pepper, and for 4 years pepper has been listed in the agricultural club for over $ 1 billion. However, by 2018, pepper exports have not been 800 million USD because of oversupply, plummeting prices.
According to the Ministry of Agriculture and Rural Development's forecast, the price of pepper in 2019 and the following years is still in a low trend because global pepper output will continue to increase, of which Vietnam's alone is expected to reach nearly 300,000 tons, due to Therefore, the export turnover will hardly reach USD 1 billion.
The output of export pepper has continuously increased, but the value has been declining, making both farmers and businesses worried.
In the domestic market, pepper prices still fluctuated and decreased in August 2019 and as of September 9, pepper prices in Dak Lak, Dak Nong, Ba Ria – Vung Tau were trading at VND 43,000 – 44,000 / kg; In Gia Lai, there was VND 42,000 / kg (while in the golden period, sometimes the price was over VND 200,000 / kg). Meanwhile, oversupply pressure on the world market continued to increase as the two major producing countries, Indonesia and Brazil, entered the harvest, and inventories of major producing countries were still large.
For cashew industry, in August 2019, the export volume of cashew nuts was about 47,000 tons with a value of 322 million USD, bringing the export volume in the first 8 months of 2019 to reach 287,000 tons and a value of 2.1 billion USD, increased by 18.8% in volume but decreased by 7.3% in value over the same period in 2018. The reason is that the price of cashew nuts plummeted by 21.9% over the same period when reaching only US $ 7,468 / ton.
Domestic raw cashew price is low, but since the beginning of the year, Vietnamese enterprises still have to import 1.15 million tons of raw material from Ivory Coast, Indonesia …, turnover is 1.51 billion USD ( increasing by 29.6% in volume and decreasing by 16.2% in value).
Specifically, the price of cashew nuts purchased in Binh Phuoc in August decreased from 34,000 VND / kg to 31,000 VND / kg, before the middle of the month, cashew price reached a high level of 36,500 VND / kg; In Dong Nai, it was stable at VND 6,000 / kg. Meanwhile, in the Indian market, the picture of the market is the opposite as prices of all kinds have increased. Specifically, cashew WW180 at 14,931 USD / ton, an increase of 972.3 USD / ton; mankind WW210 at 13,195.5 USD / ton, an increase of 868 USD / ton …
Where to find opportunities?
While pepper exports to most markets have declined in value, notably, exports to Germany have increased sharply in both volume and value. Specifically, in the first 7 months of 2019, pepper exports to Germany reached 8,000 tons, equivalent to US $ 23.4 million, up 53.3% in volume and 14.4% in value over the same period in 2018.
It is known that Germany increased pepper imports to serve the growing pepper processing industry in the country. Although German pepper consumption has started to decline since 2013, pepper imports still increased by about 4% per year between 2014-2018.
“In the context that Vietnam's pepper exports are facing many difficulties and great competitive pressures, Vietnam's successful signing of EVFTA will be a good opportunity for the pepper industry to boost exports, especially. Processed pepper to Germany and EU countries. Vietnam can increase its competitiveness in the EU compared with non-EVFTA competitors thanks to the removal of tariff barriers. Currently, the EU is applying a tax rate of 4% for imported ground pepper; After EVFTA takes effect, this tax rate will be immediately removed for pepper products imported from Vietnam ”- Department of Agricultural Product Processing and Market Development said.
Another advantage is that in the past, exporting pepper to the EU had to meet individual standards of each country, after EVFTA came into effect, businesses only needed to meet the common standards of the whole bloc. Vietnam will also take advantage of opportunities to develop pepper processing industry as EU investors move processing plants to Vietnam to take advantage of cheap raw materials and labor.
“In the long term, quality will be the decisive factor for pepper price, so we have to change production practices and resolutely reduce acreage in unsuitable places with poor productivity. Reducing pesticide residues, ensuring traceability, creating pepper products that meet the requirements of the EU and other demanding markets. In particular, the processing capacity needs to be improved, because although the whole country has more than 200 pepper processing factories, the processing is very modest. ”- Mr. Nguyen Quoc Toan – Director of the Department of Processing and Market Development Agricultural products stressed.
Thien Huong
Source: Dan Viet Newspaper
