Vietnam - Demand for pepper in the US market increased sharply

 

Demand for pepper in the US market increased sharply

Posted onJune 23, 2024by VPA

June 23

The amount of US pepper imports increased by 24.5% over the same period last year. Of which, Vietnam is the main supplier, accounting for 76% of the market share.

According to the Vietnam Pepper and Spice Association (VPSA), in the first 5 months of the year, Vietnam  exported   a total of 114,424 tons of pepper of all kinds with a turnover of 493.1 million USD, down 13.2%. In terms of volume, however, export turnover increased by 20.6% over the same period last year.

In particular, the US surpassed China to return to the leading position in Vietnam's largest pepper export market with a volume of 30,466 tons, accounting for 26.6% of the market share and an increase of 44.4% over the same period. period.

According to data from the US International Trade Commission (USITC),  the country's demand for pepper  imports  is increasing strongly again after two consecutive years of decline due to the impact of  inflation   and rising interest rates.

By the end of April this year, the US imported 27,872 tons of pepper from the world worth 130.53 million USD, up 24.5% in volume and 24.2% in value compared to the same period last year. .

In April alone, the amount of imported pepper was 8,007 tons, up 39% over the previous month and up 32.8% over the same period in 2023.

 Source: Hoang Hiep compiled data from USITC 

Notably, Vietnam continued to be the largest pepper supplier to the US in the first 4 months of the year, accounting for 76% of the market share with a volume of 21,259 tons, worth more than 97.3 million USD, an increase of 19.2% in terms of sales. quantity and increased 21.5% in value compared to the same period last year.

In addition, the US also increased pepper imports from other markets such as: India reaching 2,258 tons, an increase of 20.8%; Indonesia reached 2,233 tons, an increase of 133.6%; Brazil reached 1,106 tons, an increase of 59.2%.

 Vietnam's average export price of pepper  to the US in the first 4 months of the year reached 4,576 USD/ton, up 1.9% over the same period last year. At the same time, it is higher than Brazil's price of 4,017 USD/ton, but lower than 4,933 USD/ton of Indonesia and 5,000 USD/ton of India.

Vietnamese pepper holds a large market share in the US thanks to its good price and increasingly high quality, making it popular in this market. Vietnam's pepper industry is also highly appreciated for its processing capacity with the rate of processed goods accounting for about 30% of total export turnover.

In terms of consumption demand, the US is currently the world's largest pepper importer. In the past 3 years, the US has spent 320 - 440 million USD/year to import this spice, equivalent to 19 - 20% of global pepper trade.

 Source: Hoang Hiep compiled data from USITC 

In recent times, the global pepper supply has decreased while demand has increased from the US and some other major markets, pushing the price of this commodity to its highest level in the past 8 years.

In Vietnam's domestic market, as of June 21, black pepper prices were traded at 156,000 - 160,000 VND/kg, nearly doubling compared to the beginning of the year and 2.2 times higher than the same period last year.

However, this price has decreased by about 20,000 VND/kg compared to the peak of 180,000 VND/kg reached on June 11.

The Import-Export Department (Ministry of Industry and Trade) forecasts that pepper prices will continue to increase in the near future, but the growth rate will slow down. There is currently a shortage of pepper supply while demand has recovered strongly from major markets such as Europe, the US and China. This year's pepper output from Vietnam and many major producing countries is forecast to decline, due to the impact of the El Nino phenomenon and the decline in cultivated area.

According to the Vietnam Pepper and Spice Association, the prolonged drought weather phenomenon has led to a 10% decrease in Vietnam's pepper output this year to about 170,000 tons compared to last year, the lowest level in 5 years. via.

Meanwhile, just through the first 5 months of the year, Vietnam has exported over 114,000 tons, equivalent to 67% of output. This shows that the supply for export is not much left.

“Although pepper prices are forecast to continue to increase in the near future, the management agency recommends not massively expanding planting areas but focusing on investing and taking care of intensive farming to grow pepper. sustainable and stable development,” said the Import-Export Department.