*Vietnamese pepper prices are forecast to have room to increase in the context of widespread Brazilian pepper crop failures for the third consecutive year.
*Pepper price 'evaporated' by nearly 30,000 VND/kg after reaching a record high:
What is the reason?
*Pepper exports in the first 6 months of 2024: Output decreases, turnover increases
There are many new developments, what will be the future price of pepper?
Opens up opportunities for Vietnamese pepper
According to new data announced by the Brazilian Government, the country's pepper exports in June 2024 only reached 5,333 tons, down 9.7% compared to May 2024. In the first 6 months of this year, Brazil exported 37,181 tons of pepper, down 6% compared to the same period in 2023.
The main reason why Brazilian pepper exports decreased was due to a sharp decrease in harvest output due to the effects of drought and disease. Brazil's two largest pepper growing regions, Espirito Santos and Para, are expected to enter new harvests in August and November, respectively. However, experts predict that this year's harvest in these two regions may decrease by 20-30% compared to 2023, down to only about 60,000 tons.
Therefore, NedSpice forecasts that Brazil's total pepper output this year will decrease by 18.2% compared to 2023, to 90,000 tons. Brazil is currently the second largest producer and exporter of black pepper in the world after Vietnam, accounting for 17 - 18% of the total global supply. Therefore, the continuous crop failure in Brazil will cause a global spillover effect, which is expected to push up global pepper prices in the last months of this year when pepper supply from other large producing countries such as Vietnam, Malaysia, Indonesia... also all declined significantly.
Brazil's crop failure is expected to open up opportunities for the Vietnamese pepper industry to increase market share and further strengthen its position in key markets such as the US, China and Europe. However, Vietnamese businesses may also have difficulty finding alternative sources of supply for Brazilian pepper, especially when freight rates are still high and maritime congestion has not been completely resolved. to.
In addition, Brazil's pepper export price to Vietnam in the first half of this year was also significantly lower than Vietnam's average export price to the international market. Therefore, the shortage of imported pepper supply from Brazil may cause domestic pepper prices to increase in the coming months.
Brazilian pepper exports decreased sharply this year due to the impact of drought and disease. This is expected to push global pepper prices up in the last months of this year, creating opportunities for the Vietnamese pepper industry to increase its market share. However, Vietnamese businesses also need solutions to cope with supply shortages and price fluctuations.
Commenting on the market, Vice Chairman of Chu Se Pepper Association (Gia Lai) Hoang Phuoc Binh said that currently pepper prices are in a state of "shaking", meaning sometimes up, sometimes down, but looking at The general trend will continue to increase. The main reason is that the supply of pepper in Vietnam is currently exhausted because the output of the 2023 - 2024 crop also decreased quite a lot compared to the previous crop.
The whole year's export forecast is more than 1 billion USD
Besides, according to data from the Vietnam Pepper and Spice Association (VPSA), as of July 15, 2024, the total export turnover of pepper reached 690.7 million USD and imports reached 74 million USD. 1 million USD (mainly raw materials). Thereby, the entire industry had a trade surplus of 616.6 million USD.
Regarding exports, in the first 6 months of the year, Vietnam exported 142,586 tons of pepper of all kinds, worth 634.2 million USD, down 6.8% in volume but up 30.5% in turnover. Specifically, the amount of black pepper exported reached 125,959 tons, worth 539.9 million USD; White pepper reached 16,627 tons, worth 94.3 million USD.
The highlight in pepper exports in the first 6 months of the year is the high selling price. The average price of exported black pepper reached 4,365 USD/ton, white pepper reached 5,983 USD/ton, an increase of 922 USD/ton for black pepper and 1,028 USD/ton for white pepper compared to the first 6 months of 2023.
In the domestic market, in recent days, pepper prices have fluctuated around 150,000 VND/kg, twice as high as in 2023.
VPSA stated that the reason why Vietnam's pepper exports increased in the first 6 months of the year was due to the scarcity of pepper supply in the world market. Currently, Vietnam ended its harvest in March, while the harvest of Brazil - the world's second largest pepper exporter - just started in August.
In addition, pepper prices increased because demand on the world market remained high, while supply was limited.
With high growth momentum in the first 6 months of the year, plus export prices continuing to be high, VPSA forecasts that Vietnam pepper exports this year will reach over 1 billion USD, thereby bringing pepper back to normal. billion-dollar industry group for the first time since 2017.
This is a positive signal for Vietnam's pepper industry, affirming Vietnam's position as the world's leading pepper exporter.
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