In 2019, Vietnam's pepper prices as well as global pepper prices continue to be bleak, falling to unprecedented lows. Forecasting the prospect of pepper price in 2020 will not be brighter, but may inch up by 2021 thanks to the production of this spice tends to decrease.
Pepper prices in key raw material areas in the Central Highlands on February 7 continued to decline, only from VND 36,000 to VND 39,000 / kg. Artwork image
Pepper price went to the “bottom” due to excess production, only 39,000 – 41,000 VND / kg
In 2019, world pepper prices continue to fall into “tragedy” when reaching the lowest level in 12 years. In Vietnam, local pepper prices decreased from VND 50,000 to VND 52,000 / kg in early 2019 to a bottom of VND 39,000 – VND 41,000 at the end of 2019 and as of February 7, 2020, pepper prices in provinces The Central Highlands is only 36,000 – 39,000 VND / kg.
Compared to the peak of 230,000 VND / kg in 2015, today's pepper prices have “evaporated” to lose nearly 4/5.
According to Mr. Hoang Phuoc Binh – Vice Chairman of Chu Se Pepper Association (Gia Lai province), the price of pepper dropped below 40,000 VND / kg making this industry increasingly gloomy. It is worth mentioning that before, although pepper prices have decreased, production costs are still low so farmers still have profits, while at present, the price is up to 49,000 VND / kg, so at this price, farmers serious money loss.
According to preliminary calculations of the International Pepper Commission (IPC), world pepper production in 2019 decreased for the first time in several years in a row, mainly due to adverse weather in Vietnam. Specifically, global pepper production is 74,000 tons lower than in 2018.
However, the world supply of pepper is still more than 60,000 – 70,000 tons more than demand.
IPC estimates that Vietnam currently has about 100,000 hectares of pepper being harvested, of which in 2019, the output of black pepper will be 175,000 tons and 25,000 tons of white pepper, the total output will reach 200,000 tons, continue to hold the position of a major producing country. best of the world. Compared to 2018, Vietnam's output has decreased slightly due to less pepper area. Vietnam began to focus on improving the quality of pepper rather than increasing production. Specifically, reducing chemical use and efforts to develop organic pepper production.
Pepper output and export volume of major markets in 2019.
Brazil is the second largest producer with a total production of 67,000 tons in 2019, including 64,000 tons of black pepper and 3,000 tons of white pepper. Like Vietnam, Brazilian pepper production also decreased in 2019 compared to 2018. The reason is that some pepper gardens have been exhausted, while newly planted white pepper farms have not yet been harvested.
Indonesia holds the position of the third largest producer in 2019 with 25,000 tons of black pepper and 40,000 tons of white pepper. Compared to 2018, estimated 2019 production also decreased. The reason is because many pepper gardens in the main pepper growing areas do not invest much in this crop when the price in the world falls. Indonesian pepper growers have not been interested in this plant for several years.
Indian pepper production is estimated to decrease compared to the previous year, reaching only about 45,000 tons of black pepper and 1,500 tons of white pepper. The reason is that production in many Kerala state farms was severely affected by floods in mid-August 2019. Bad weather also causes fungi to damage plants later.
China's pepper production in 2019 is estimated at 33,000 tons, including 1,000 tons of black pepper and 32,000 tons of white pepper. Thus, the output has decreased by 6% compared to the previous year.
Only 2 countries with increased pepper production are Sri Lanka and Malaysia. In particular, Sri Lanka's pepper output is estimated at 26,700 tons, an increase of 44% compared to 2018; Malaysia reached 24,000 tons. Some Malaysian pepper areas are in a period of high productivity, so the country's output has increased slightly compared to the previous year.
Pepper price is forecast to drop below VND 38,000 / kg
Regarding pepper exports, in 2019, Vietnam continues to lead the world. According to the IPC estimates given at the end of 2019, Vietnam exported 215,000 tons (the export figure was higher than the output due to the export of part of the pepper from the previous year); Brazil exported about 57,600 tons, Indonesia 37,000 tons, Sri Lanka 20,200 tons, India 17,000 tons, Malaysia 14,000 tons and China 1,000 tons.
Vietnam's pepper production in 2019 is the highest among producing countries, according to calculations by the International Pepper Commission (IPC).
Meanwhile, according to preliminary estimates of the General Department of Vietnam Customs announced in early 2020, Vietnam's pepper exports in 2019 reached 283,836 tons, up 22% compared to 2018 and the third consecutive year of increase.
However, the export value of pepper in 2019 decreased by 5.4%, reaching only US $ 714.14 million due to the decrease in global pepper prices last year (the average export price of Vietnam in 2019 decreased by 22.8% compared to Last year, only 2,516 USD / ton).
It is forecasted that from now to the end of 2020, the price of pepper will continue to remain low, or maybe even decrease due to the planted areas from 2016 – 2017 in major producing countries like Vietnam. at high output.
Some industry experts forecast, Vietnamese pepper prices may be reduced to only VND 36,000 – 38,000 / kg this year, even to a depth of VND 35,000 / kg.
However, from the end of 2020, prices may begin to recover when the supply and demand return to the equilibrium level and many businesses increase their stockpiling buying while the price of pepper remains low. By 2021, the price of pepper will likely inch up when the output of most countries has plummeted, including in Vietnam.
