Pepper
price today July 8 is in the range of 150,000 - 151,000 VND/kg. Last
week it lost up to 6,000 VND/kg, but pepper is having a series of 2
consecutive days of increases. Signs of supply shortage continue to be
the driving force for pepper prices to increase this week, expected to
regain the 160,000 VND/kg mark.
In Dak Lak province, today's pepper purchase price is 151,000 VND/kg.
In Dak Nong province, today's pepper price was purchased at 151,000 VND/kg.
In Gia Lai province, today's pepper price is 150,000 VND/kg.
Meanwhile in Dong Nai, today's pepper price is at 150,000 VND/kg.
In Ba Ria - Vung Tau province, pepper price today is at 150,000 VND/kg.
In Binh Phuoc province, today's pepper price is purchased at 150,000 VND/kg.
Pepper
prices at the beginning of this morning remained stable in localities
compared to the same time yesterday. Summarizing last week, pepper
prices decreased by an average of 3,000 - 6,000 VND/kg.
Vietnam
Pepper and Spice Association informed that in the first 6 months of the
year, Vietnam imported 18,002 tons of pepper of all kinds, of which
black pepper reached 16,357 tons, white pepper reached 1,645 tons. Total
import turnover reached 69.6 million USD.
Compared
to the same period last year, imports increased by 18.9%. The 3 main
countries supplying pepper to Vietnam include: Brazil: 7,241 tons, down
22.3%; Cambodia: 6,212 tons, up 34.5%; Indonesia: 2,991 tons, up 67.3%.
In
the context of reduced domestic supply, domestic businesses have had to
increase import of pepper from other countries. In the past, Brazilian
pepper was always considered reasonably priced, and many countries
sought to import it. However, this year with the general increase in the
market, Brazilian pepper prices also increased quite rapidly. In this
country, the pepper harvest is also forecast to be unfavorable.
In
addition, increased transportation costs due to political instability
in the world make it difficult to import pepper from Brazil. Faced with
the above situation, it is understandable that pepper imports from
Southeast Asian countries Indonesia and Cambodia increased sharply.
Commenting
on the market, experts said that last week it lost up to 6,000 VND/kg,
but pepper is having a series of 2 consecutive days of increases during
the weekend.
The
Vietnam Pepper and Spice Association quoted experts as saying that
signs of supply shortage compared to demand will continue to be recorded
in the near future until the end of the season. This continues to be
the driving force for pepper prices to increase this week, expected to
regain the mark of 160,000 VND/kg.
In
recent times, price information on the website of the International
Pepper Association (IPC) about Vietnamese pepper prices has differed
greatly from the information provided by VSPA, and at times there were
errors. To avoid psychological fluctuations that lead to making
decisions that cause economic damage, we recommend that farmers, agents,
export companies, and foreign customers refer to other sources to
ensure more objectivity and reliability when deciding to buy/sell. VPSA
will try to update information about countries and export prices of
Vietnamese Pepper in the most accurate and timely manner.
Data
show that by the end of June 2024, Vietnam has exported an estimated
140 thousand tons, with a turnover of 550 million USD, down 8.2% in
volume but up 32.2% in value over the same period. 2023. Thus, there are
still 7-8 months left until the new harvest (expected after the Lunar
New Year from February 2025) while the amount of goods left by people,
agents and businesses is not as much as VPSA received. previously
determined.
Brazil,
by the end of May, had exported 31,846 tons, down 8% over the same
period. It is expected that the next harvest will be in August 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.
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.
Some
experts believe 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.
Last
week, after continuously decreasing for 2 weeks, the pepper price
quickly rebounded with a price increase of around 4% recorded. The
amount of pepper offered on the market is not profuse.
Although the market is facing many obstacles such as:
• Shipping costs continue to rise rapidly and are forecasted to remain high until 2025.
• Rising
raw material prices alongside longer-than-usual shipping voyages have
affected the cash flow of most producers and exporters. Liquidity in the
domestic market is often very low at many times.
However,
there are still signals indicating that the market will develop
sustainably in the coming time, especially in the fourth quarter of 2024
and the first quarter of 2025.
Let’s take a look at some export data for the past 9 months of the last 3 years and the forecast scenario for 9 months of 2024.
Year
ExportedQuantityThird Quarter (Metric ton)
ExportedQuantityFirst 9 months (Metric ton)
2021
46.072
156.202
2022
51.668
177.221
2023
51.399
204.385
2024
49.713
195.713
PleaseNote; third quarter 2024 and first 9 months 2024 is projection number.
Please see the REPORT FILE & FULL QUOTATION LIST by click to download.
In
recent times, price information on the website of the International
Pepper Association (IPC) about Vietnamese pepper prices has differed
greatly from the information provided by VSPA, and at times there were
errors. To avoid psychological fluctuations that lead to making
decisions that cause economic damage, we recommend that farmers, agents,
export companies, and foreign customers refer to other sources to
ensure more objectivity and reliability when deciding to buy/sell. VPSA
will try to update information about countries and export prices of
Vietnamese Pepper in the most accurate and timely manner.
According
to forecasts, in 6 months, Vietnam's export is estimated at about 28
thousand tons, equivalent to about 135 USD. Thus, there are still 7-8
months left until the new harvest (expected after the Lunar New Year
from February 2025) while the amount of goods left by people, agents and
businesses is not as much as VPSA reports. previously stated.
Pepper
price today June 26 is in the range of 144,000 - 146,000 VND/kg. The
International Pepper Community listed an increase in pepper prices in
Indonesia and Brazil, while continuing to decrease sharply in Vietnam.
Earlier this week, the domestic market had a second shock.
Earlier
this week, the domestic market had a sharp decline for the second time
since the beginning of the month. Along with that, export pepper prices
were adjusted to decrease continuously, causing the domestic market to
be affected.
On
June 12, domestic pepper prices reached a record level after many years
of low levels, reaching 180,000 VND/kg. Immediately after that, the
selling force at the peak pulled the price down to 20,000 VND/kg.
The market struggled within the threshold of 160,000 VND/kg for nearly 10 days then dropped sharply by 15,000 VND/kg.
Experts
say that in reality, when the price reaches 180,000 VND/kg, buyers
almost stand aside. Therefore, adjusting prices down is reasonable now.
However, what is the floor price for this reduction, and how many more
reductions are there?
Some
dealers have faced shortages when they sold out and were unable to buy
back when the market increased rapidly. Some agents holding farmers'
goods are now back to "squeezing" prices.
At
the end of the most recent trading session, the International Pepper
Community (IPC) listed Lampung (Indonesia) black pepper price at 7,112
USD/ton, an increase of 0.31%; Brazilian black pepper price ASTA 570 is
at 7,500 USD/ton, up 300 USD/ton; Kuching (Malaysia) ASTA black pepper
price is 7,500 USD/ton.
Muntok white pepper price was 9,056 USD/ton, up 0.32%; Malaysian ASTA white pepper price is at 8,800 USD/ton.
The
pepper and coffee markets have just experienced a sharp increase in
prices. Accordingly, coffee prices hit a record of nearly 120,000
VND/kg. And pepper exceeded 100,000 VND/kg after a long period of
crisis, sometimes just over 30,000 VND/kg in 2021.
Shortage
of supply while high demand is the main reason why prices of these two
products increased sharply. With pepper and coffee trees, after a long
period of price crisis, people have cut down quite a lot to switch to
other types of trees. In addition, bad weather has also affected output.
However,
behind that are stories of the industry with speculation, people
lacking motivation to return to pepper or stories of sustainable
development.
To
better understand the story of this industry, we had a conversation
with Mr. Le Duc Huy, General Director of Simexco Daklak - top 3 coffee
exporting enterprises and top 6 pepper exporting enterprises in the
country.
Mr. Le Duc Huy, General Director of Simexco Daklak (Photo: NVCC).
Reporter:
In recent times, pepper prices have increased due to lack of supply
because people previously cut down many of these trees. In your opinion,
is the fact that the price of pepper has exceeded 100,000 VND/kg enough
to attract people to return to this crop?
Mr. Le Duc Huy:
Pepper prices have increased in recent times because demand exceeds
supply. In the long term, the demand for spices will increase while
Vietnamese pepper has reached the point of aging and the current price
level still cannot stimulate people to grow more. However, it is
difficult to determine at what price people can return to pepper trees
because it depends on the prices of other rival trees such as durian,
passion fruit, coffee...
Even
when the price of pepper reaches 100,000 VND/kg, it is still not enough
to attract people to grow it again because compared to the profits from
other crops, especially durian, the income from pepper is still much
lower.
When
compared to coffee, the profit from pepper is still lower because
coffee farming is easier. Pepper plants are climbing plants and are
extremely vulnerable. The yield per tree of coffee is also much higher
than that of pepper.
In
addition, people have just experienced a pepper price crisis that has
lasted for many years, sometimes the price dropped to more than 30,000
VND/kg, so they do not have enough confidence to replant at this time.
Therefore,
inventory in the next 3-5 years will continue to decrease. In the long
term, pepper prices are unlikely to decrease further.
Reporter:
The current trend is that markets are tightening requirements on
maximum pesticide residues (MRL), especially the EU, which is a
counter-punch to the Vietnamese pepper industry, making output even more
difficult. heart recovery?
Mr. Le Duc Huy:
As I mentioned, pepper plants are very vulnerable, so the use of
fertilizers and pesticides is difficult to avoid. But this is also
something to worry about when the increasing standards of export markets
are also a barrier.
Looking
at the more positive aspect, this is a future trend, farmers will be
forced to follow the path of "clean" farming, minimizing the use of
chemical fertilizers, creating a good environment and landscape. .
We
ourselves also pursued the path of sustainable farming more than a
decade ago, along with intercropping many types of plants. Therefore,
linked households have also weathered the price storm without having to
cut down pepper trees. The current trend for small gardens is
sustainable and multi-crop planting.
As a result, the output product has very low pesticide residue and is sold at a good price.
Reporter:
The increase in pepper and coffee prices is good news for farmers, but
for export businesses, it is a big obstacle when they cannot buy goods
to deliver to customers because of lack of supply. How to solve the
problem of balancing the interests of all parties, meaning that both
farmers and businesses are "happy" and the market is healthier?
Mr. Le Duc Huy:
Exactly. The sharp increase in prices recently has caused many
businesses difficulties and so do we, because the supply of both pepper
and coffee is decreasing. But the difference between businesses is how
to respond to this situation.
Recently,
the Government and associations positioned Vietnam to become the
world's kitchen. We have become a country that produces consumer goods,
packaged goods, and jars for consumers to use; instead of raw export
like before.
Therefore,
when focusing on the processing story, we can import raw materials from
other countries to make consumer goods, when domestic supply is not
enough to meet the demand.
But
it is important that market participants (including farmers) need to
reduce speculative thinking. For producers, they need to supply products
to the market and only keep a portion. Avoid situations where producers
borrow to speculate and hoard goods. This is against market rules.
With
intermediary businesses, they should do well their role as connectors
and circulators, avoiding profiteering speculation: When people need
money, they can buy at good prices, and when export businesses need
goods, they can supply them. full.
Some
foreign companies in Vietnam such as Olam and Nedspice are doing very
well as connectors. They healthy the market. And export businesses need
to do a good job of harmonizing the interests of all parties, not
forcing prices on anyone.
Everyone
has their own responsibilities. But I must admit that it is very
difficult to do this. The market has many businesses participating in
the supply chain. Each business has a different mindset and strategy and
they always believe they are right.
Reporter:
Talking about the story of harmonizing interests, up to now, farmers
have been considered "low-ranked" in the supply chain. However, the
negotiating power of pepper and coffee farmers has gradually increased
in the last two years. What do you think about this?
Mr. Le Duc Huy:
This is very clear in the market and this trend will continue to
increase because agricultural land is increasingly shrinking but the
population is increasing, leading to increased demand for pepper and
coffee. It is inevitable that landowners will increasingly have an
advantage in the supply chain. This is a very clear rule. But if you
want an even better supply chain, the model of linking farmers into
cooperatives is still the most optimal and more effective.
If
done individually, each person makes a different style, different
fertilizers, different medicines in small quantities. If they link
together, they can synchronize the use of fertilizers and pesticides and
buy agricultural materials in large quantities and at cheaper prices.
Even
if done well, cooperatives can become exporters. At that time, the role
of intermediary businesses will weaken if they do not do well and do
not create any added value in the chain.
The
current trend is that manufacturers are getting closer to the final
consumer thanks to the development of logistics systems and online sales
platforms. It is normal for businesses that only worry about buying and
selling to be eliminated.
Reporter: So what do intermediary businesses like Simexco need to do to avoid being eliminated?
Mr. Le Duc Huy:
We have done many things to create added value and play a good role as
a bridge over the past decades. We link a system of 40,000 farmer
households to form groups to synchronize and better manage product
quality by instructing them on sustainable farming and deep processing.
From
those products, we introduce them to consumers, especially foreign
markets. At the same time, he is also the person who stands out to
commit to quality for distributors.
We
are happy if producers can talk to consumers. Because then, producers
know what the consumer market needs and what their requirements are so
they can proactively adjust, instead of being forced like before.
Pepper
price today June 25 is in the range of 145,000 - 146,000 VND/kg. This
year, with little inventory, most farmers kept their goods. The sharp
decline earlier this week may have had speculative elements. Agents kept
farmers' goods, now turning to pressurize prices.
This
year, with small inventories, most farmers kept their goods, in a
context where there was no financial pressure like in previous years.
The sharp decline earlier this week may have had speculative elements
from market participants. Agents kept farmers' goods, now turning to
pressurize prices.
In
addition, domestic pepper prices have decreased because the world
market is plummeting. In 2 recent consecutive trading sessions,
Vietnam's export pepper prices dropped sharply. Ahead of the Muslim
holiday Eid al-Adha, the market surged as buying increased. Right after
the holiday, the trading market returned to normal, causing prices to
fall sharply.
At
the end of the most recent trading session, the International Pepper
Community (IPC) listed Lampung (Indonesia) black pepper price at 7,090
USD/ton, down 9.62%; Brazilian black pepper price ASTA 570 was at 7,200
USD/ton, down 4.17% USD/ton; Kuching (Malaysia) ASTA black pepper price
is 7,500 USD/ton.
Muntok white pepper price was 9,027 USD/ton, down 7.36%; Malaysian ASTA white pepper price is at 8,800 USD/ton.
In
the first session of the week, both world and domestic pepper prices
adjusted sharply down after a period of moving sideways at the end of
last week.
The
International Pepper Community commented that last week showed mixed
reactions when Muslims around the world celebrated Eid al-Adha.
Accordingly,
in the South Asia region, India's domestic and international pepper
prices have continued to increase over the past 5 weeks. After 5 weeks
of recording increases, Sri Lankan domestic pepper prices decreased last
week.
In
Southeast Asia, although the Indonesian Rupiah decreased by 1% against
the USD (16,415 IDR/USD), both domestic and export pepper prices in this
country continued to increase since last week.
Malaysian
domestic pepper prices continued to increase in the past 2 weeks.
Furthermore, the export price of pepper in this country also recorded an
increase. Only Vietnam's domestic black pepper price recorded a
decrease last week. Other types are stable.
After
3 weeks of recording an increase, Brazilian black pepper prices
recorded a decrease last week. Prices of Chinese white pepper and
Cambodian black pepper are both stable and unchanged.
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