VPA warns that some Chinese businessmen are making moves that affect domestic pepper trade

According to some VPA member enterprises, there is evidence that there is a group of Chinese enterprises controlling the pepper market in Vietnam these days. Specifically, in some HT exporting companies, there is a phenomenon of Chinese enterprises coming to HT exporting enterprises to order pepper. The unusual thing is that Vietnamese enterprises set their prices at any price and they agreed to buy and ask to always do business with them. Then, they hired KS near the headquarters of the export company and every day came to this company to urge the performance of the contract. Normally, after 3 days from signing the contract, they will transfer the deposit but after 3 days, they will not transfer and always affirm that they will buy and explain the reason for the slow transfer is because the bank is check records etc. This has been done by many export companies, signaling that the market is in need of buying in large quantities.

At the same time, knowing that the exporting enterprises would have to rush to buy from suppliers to implement the signed contracts with them, it was this same group of Chinese enterprises that immediately spread to the localities dealing with collecting agents. buy pepper in the area where the pepper is grown and promise to sell it to the dealer (at a price lower than the market price at that time). These agents see good words, so they will agree to buy immediately to resell to exporters. However, Chinese enterprises only sell a very small part at low prices in a very short time, after that they call for no goods, then push up the market price and sell hot sale to trading agents at their high prices. At that time, due to the pressure of the signed deals between the buying agents and the exporters and the exporters, they would sell their pepper to the dealers with the hot price set by them.

At present, some exporting enterprises when the phone comes back to them are all “Unreachable”. This approach is not new but is returning recently causing many consequences for export enterprises:

– First: Vietnamese export enterprises are busy doing contracts (often, they sign a large amount, which makes them see good profits) with Chinese enterprises, so they cannot export to other markets but then DNTQ does not perform the contract. causing export enterprises both to lose sales and to lose credibility, business relationships with importing enterprises in other traditional markets;

– Second: DNTQ causes market distortions, creating fluctuating prices, which makes domestic pepper consumers reluctant to buy and sell, affecting transactions between suppliers and exporters;

– Third: DNTQ gains a great deal from the price action according to their intentions, causing losses to farmers and Vietnam's pepper industry because the trading did not follow market rules.

It is suggested that businesses be cautious when dealing with Chinese pepper trading enterprises.