Prices increased rapidly, pepper exports were expected to reach billions of dollars
Pepper prices are continuously increasing and will continue to increase in the long term
According to information from the Ministry of Industry and Trade, from the end of April until now, pepper prices have continuously increased sharply and adjusted prices daily. For example, around mid-May 2024, the pepper price was 120,000 VND/kg. By the end of May, the pepper price increased to 127,000 - 129,000 VND/kg. Updated on June 5, pepper price nearly reached 150,000 VND/kg.
Sharing with the press, Mr. Hoang Phuoc Binh - Vice Chairman of Chu Se Pepper Association (Gia Lai) said that this year's pepper output from Vietnam and many major producing countries is forecast to decline, due to impact of the El Nino phenomenon. Besides, the area under cultivation of this agricultural product has decreased significantly. This is the basic reason why pepper prices increased sharply.
In 2024, export pepper prices will increase due to reduced output and low inventory
For more information about this story, Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association (VPSA) said that pepper prices have continuously plummeted for many years, causing many pepper growing households to halve. area, many perennial gardens were cut down and planted with durian and some other trees with higher economic value, causing supply to decrease.
Furthermore, in Vietnam, the amount of inventory transferred from last year to this year is insignificant. Meanwhile, pepper demand is recovering strongly from major markets such as Europe, the US and China. Supply is in short supply, while demand is high. Those factors are the reasons why pepper prices increased sharply.
Notably, Mr. Binh informed that the pepper area is still decreasing due to aging and people changing crops. While there is no new planting at this time, it will still not be possible to increase output in the next 4 years. Therefore, pepper will maintain a scarcity of supply.
"With the current situation, global pepper production cannot meet consumer demand, so pepper prices will still tend to increase in the next 3-5 years," Ms. Hoang Thi Lien added.
According to industry experts, pepper prices may reach a new peak of 350,000 - 400,000 VND/kg. It doesn't stop there, it is very possible that pepper is entering a new price increase cycle, normally this cycle will last for 10 years and the price of 350,000 - 400,000 VND/kg is forecast for the next 10 years. During this period, pepper prices will still have fluctuations in adjustments.
Pepper exports are expected to reach billions of USD
In the first 5 months of 2024, the United States continues to be Vietnam's largest pepper export market reaching 30,466 tons, accounting for 26.6% and increasing by 44.4% over the same period. Germany rose to become Vietnam's second largest export market reaching 7,532 tons, accounting for 6.6% and increasing 103.2%.
Some markets have impressive increases in export volume such as: Italy increased by 179.0%; Russia increased by 49.7%; Spain increased by 49.1%; Egypt increased by 39.0%…
According to VPSA's preliminary statistics, in May 2024, Vietnam exported 31,357 tons of pepper of all kinds with an export turnover of 141 million USD, the average export price of black pepper in May reached 4,542 USD /ton, white pepper reached 6,106 USD/ton, an increase of 229 USD for black pepper and 63 USD for white pepper compared to the previous month.
Accumulated in the first 5 months of the year, Vietnam has exported 114,424 tons of pepper of all kinds with a total export turnover of 493.1 million USD. Compared to the same period in 2023, export volume decreased by 13.2%, but export turnover increased by 20.6%. The average export price of black pepper in 5 months reached 4,197 USD/ton, white pepper reached 5,804 USD/ton, an increase of 754 USD for black pepper and 849 USD for white pepper respectively compared to the same period in 5 months of 2023.
Talking to reporters, a representative of the Import-Export Department (Ministry of Industry and Trade) predicted that the increase in domestic pepper prices will push up export pepper prices and we can expect the pepper industry to earn billions of dollars in export revenue. in this year.
At the same time, he added that in the world market, it is forecast that pepper prices will continue to increase in the near future, but the growth rate will slow down. In the domestic market, black pepper prices have increased sharply due to limited supply, but people should not massively expand planting areas but focus on investing and taking care of intensive farming so that pepper plants can develop sustainably. and stable.
As for businesses, VPSA recommends that export businesses be careful in purchasing and exporting activities to avoid risks similar to the recent coffee or rice prices.
Export businesses still have concerns
In fact, pepper prices increased sharply in the context of a falling USD and a tense shipping market, causing significant difficulties for export businesses in the past and in the future. In addition, many experts are also concerned about the possibility that due to speculative activities, traders and investors have gathered goods and created an artificial scarcity, pushing up pepper prices.
Many businesses share that pepper prices are double the same period last year, and have reached the highest level in the past 8 years, causing difficulties for export businesses, businesses cannot buy goods while prices continue to rise. is pushed up. Many farmers are stockpiling and waiting for prices to increase further. This is putting pressure on some businesses to collect enough goods for their partners.
Regarding this issue, Mr. Binh commented that pepper prices have increased rapidly recently due to the impact of speculative factors. Currently, world prices are increasing, domestic prices are lower than world prices, so many small dealers are holding goods, pushing up prices.
The Vietnam Pepper and Spice Association (VPSA) currently estimates that Vietnam's pepper output in 2024 will only reach about 170,000 tons, down 10% compared to the previous year. This is also the lowest level in the past 5 years. The reason is that many farmers cut down pepper trees when prices fell 4 years ago (pepper price dropped to only 40,000 VND/kg) to plant more economically beneficial trees such as durian, coffee...
Global pepper production in 2024 is expected to reach about 465,000 tons, down 1.2% compared to last year. Meanwhile, global pepper consumption demand is expected to reach 529,000 tons, exceeding production by 64,000 tons. This caused inventories to continue to decline to 428,000 tons, the lowest level in the past 6 years.
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