How much does Vietnam buy Brazilian pepper?

Posted onAugust 2, 2024by VPA

02
Aug

Despite recording an increase of 19%, Brazil's pepper export price to Vietnam is the lowest price among the top 15 importing countries of this country?

Vietnam is the largest pepper exporter to the United States

According to the International Trade Center (ITC),  pepper exports  from the world's main producing countries have contradictory patterns. In the first half of 2024, the two leading exporting countries in the world, Vietnam and Brazil, decreased by 6.8% and 6.0%, respectively. In the same direction, Malaysia's exports also decreased by 8.1%, while Indonesia and India's exports increased by 48.3% and 34.1%.

Vietnam is Brazil's largest pepper buyer

Compared to the same period in 2023, in the first 6 months of 2024, the average FOB price of black pepper and white pepper in most main producing countries increased sharply, except India. Specifically, the average FOB price of black pepper increased by 27% and the average FOB price of white pepper increased by 14% over the same period last year. The strongest increase was recorded in Brazilian black pepper, followed by Vietnam and Indonesia.

Global pepper trade from the beginning of the year until now recorded a decrease of more than 20% compared to the same period in 2023. The largest decrease came from the Chinese market, down 85%, mainly because this country reduced imports from Vietnam.

The United States  is the largest pepper consuming market in the world, of which Vietnam is the largest exporter to the United States accounting for 75.8%, followed by India accounting for 8.5%, Indonesia accounting for 8.4%. and Brazil accounts for 4.0%.

The price of Brazilian pepper exported to Vietnam increased by 19%

In Brazil, the harvest ended in the states of Espírito Santo and Bahia with yields 10% lower than last year due to the impact of the El Nino drought phenomenon at the beginning of the year.

Brazil is continuing to harvest in the Espirito Santos region and in November in the Para region, it is estimated that the whole country will collect about 60 thousand more tons. Climate change (La Nina) will affect the production of Brazilian pepper in the coming months.

According to some farmers in the Espirito Santos region, the harvest in 2024 may be 25-30% lower due to the heat causing most of the first cotton to fall and the ratio of fruit set to buds of the second and second cotton blooms. Phase 3 is quite low so it is expected to only reach about 70% compared to last year. Overall, the whole country in 2024 may decrease by 20-25% compared to 2023.

In the first 6 months of 2024, Brazilian pepper exports reached 37,181 tons, turnover reached 141.7 million USD, down 6.0% in volume but up 21.4% in value compared to the same period last year.

Brazil's main export markets include: Vietnam reached 5,910 tons, accounting for 15.9%, down 21.5% over the same period. Next is the market reaching India: 3,892 tons, accounting for 10.5%, an increase of 47.2%; Pakistan reached 3,703 tons, accounting for 10.0%, an increase of 63.3%; Senegal reached 3,659 tons, accounting for 9.8%, down 19.6% and Morocco reached 3,565 tons, accounting for 9.6%, down 9.5%...

Exports to Egypt, the Netherlands, and Mexico decreased while exports to the UAE and Germany increased, especially exports to the United States increased by 701.1% to 1,402 tons, however compared to the same period in 2022, it reached 3,002 tons. export volume decreased by 53.3%.

 The average Brazilian pepper export price in the first 6 months of the year reached 3,810 USD/ton, up 29.3% over the same period last year, of which the export price in June increased by 31.1% compared to January 2024. Notably, the average price of Brazilian pepper exports to Vietnam reached 3,488 USD/ton, an increase of 19.0% over the same period in 2023 and this is the lowest price among the top 15 importing countries, lower than the UAE. : 4.0%; India: 7.8%; Netherlands: 8.8%; United States: 9.2% and Germany: 17.5%.

In Vietnam, Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association - said that Vietnam's pepper exports  in the first 6 months of 2024 reached 142.5 thousand tons compared to the year's harvest. 2024 will reach about 170 thousand tons, the remaining output is estimated to reach about 28 thousand tons.

Inventories from the 2023 crop combined with imports in 2024 of about 40-45 thousand tons (including quota imports) show that the source of exported goods from August until the end of the year will be lower than every year and until March. /2025 when the 2025 crop is expected to be harvested. It is forecasted that pepper prices  will have unusual fluctuations such as on June 11, the price increased sharply by 20,000 VND in the morning but dropped sharply again in the afternoon.

The domestic pepper market in the early days of August was still trading around the 147,000 - 150,000 VND/kg mark although many comments about supply shortages in the country and the world were still being made. Currently, both sellers and buyers are waiting for the latest market movements when Indonesia is expected to harvest the pepper crop in August.

Some experts continue to comment that signs of supply shortage compared to demand will continue to be recognized and reflected by the market in the coming time until the end of the season. Currently, Brazil has 3 sterilized pepper factories and is building 2 more factories and will be completed in 2025. In the future, Brazilian pepper will compete better with Vietnam, so imported supply will less, so Vietnamese businesses need to proactively source raw materials.

According to Congthuong.vn