Pepper price increase, great opportunity for export businesses

Pepper export prices increase sharply

In the first 6 months of 2024, Vietnam's domestic and export pepper prices increased sharply, reaching nearly 153,000 VND/kg, double that of last year. In the international market, the export price of black pepper reached over 4,300 USD/ton and white pepper nearly 6,000 USD/ton, an increase of about 1,000 USD per ton compared to the same period in 2023. Despite the high prices, many countries still increased their imports of Vietnamese pepper, especially the US, Germany, India and the UAE.

According to the Vietnam Pepper and Spices Association, the average export price of black pepper in the first 6 months of 2024 reached 4,365 USD/ton, white pepper reached 5,983 USD/ton, an increase of 922 USD for black pepper and 1,028 USD for white pepper compared to the same period in the first 6 months of 2023.

Domestic pepper prices recorded on July 15 were around 150,000 - 151,000 VND/kg in the provinces of the Southeast and Central Highlands. The domestic pepper market has recently witnessed strong fluctuations, significantly affecting the profits of pepper growers.

Pepper prices increased due to Vietnam having an earlier harvest season than Brazil and India, along with high pepper quality and the impact of El Nino causing a decrease in supply.

El Nino and adverse weather conditions have reduced pepper production in major producing countries such as Vietnam, Brazil and India. This has led to a shortage of supply and a sharp increase in pepper prices. Ms. Hoang Thi Lien, Chairwoman of VPSA, said that inventories in major producing countries are low due to high demand and the impact of weather.

Vietnamese pepper is popular in the international market thanks to its high quality. With an early harvest and quality products, Vietnamese pepper has prevailed in meeting market demand in the context of reduced supply.

Mr. Hoang Phuoc Binh - Vice President of Chu Se Pepper Association ( Gia Lai ) said: " This year's pepper output of Vietnam and many major producing countries is forecast to decrease, due to the impact of the El Nino phenomenon. In addition, the area of cultivation of this agricultural product has decreased significantly. This is the fundamental reason for the sharp increase in pepper prices."

Experts predict that Vietnam’s pepper output could fall to its lowest level in the past five years, reaching only about 170,000 tons. Export supply will not be abundant until the end of the year. This means that pepper prices will continue to remain high.

A representative of a large pepper exporting enterprise in Dak Nong said that pepper prices are in an increasing cycle and may reach new peaks depending on the time. However, enterprises need to anticipate the possibility that pepper prices will cool down in order to adjust production and business activities effectively, avoiding widespread expansion of acreage or signing contracts to buy and sell far away, which can easily lead to risks.

Attraction to importers

Despite the high price, Vietnamese pepper is still being purchased more by many countries. According to data from the Vietnam Pepper and Spice Association (VPSA), by June 2024, the US was the largest import market with 37,435 tons, up 44.6% over the same period last year, accounting for 26.3% of the market share. Germany ranked second with 9,526 tons, up nearly 107%, India 8,173 tons, up 46%. Buyers from the UAE also bought 8,388 tons, up more than 15% over the same period in 2023.

In the first 6 months of 2024, Vietnam's pepper export volume reached 142,586 tons, up 30.5% over the same period. Of which, black pepper accounted for over 88% of export output, the remaining 12% was white pepper.

Regarding the import market, in the first 6 months of 2024, Vietnam imported 18,002 tons of pepper of all kinds, of which black pepper reached 16,357 tons and white pepper reached 1,645 tons.

Total import turnover reached 69.6 million USD, up 18.9% over the same period last year. The three main countries supplying pepper to Vietnam include Brazil, Cambodia and Indonesia.

According to businesses, Vietnam's pepper export turnover increased despite a decrease in export output due to the continuous increase in pepper prices in the first half of this year.

Pepper prices increase sharply

Golden opportunity for pepper exporting enterprises

According to VPSA, the global pepper market size is about 5.4 billion USD and is forecast to increase by an average of about 20% in the period 2024-2032. The Import-Export Department ( Ministry of Industry and Trade ) forecasts that pepper prices will continue to increase, although the growth rate will slow down, but there is still a possibility of reaching the export milestone of 1 billion USD this year.

Vietnamese enterprises have advantages thanks to product quality and early harvest. In addition, the increase in demand from large markets and the decrease in output from other producing countries create great opportunities for Vietnamese enterprises to increase exports.

To take advantage of opportunities and overcome challenges, the Vietnamese pepper industry needs strategic steps and close coordination between the government, associations, businesses and farmers. This will not only help stabilize the market in the short term but also ensure the sustainable development of the industry in the long term.

“ The quality of pepper is guaranteed, making it easy to penetrate markets. In particular, pepper exports to the Chinese market are expected to grow well in 2024 because the country’s annual pepper import demand is about 65-70 thousand tons ,” added Ms. Hoang Thi Lien, Chairwoman of the Vietnam Pepper and Spice Association.

The sharp increase in pepper prices in 2024 will create many opportunities as well as challenges for the Vietnamese pepper export industry. With high consumption demand from international markets and a decline in global production, pepper prices are forecast to continue to remain high. To take advantage of this opportunity, the Vietnamese pepper industry needs to have sustainable development strategies, with close coordination between the state, associations, businesses and farmers.

This not only helps stabilize the market in the short term but also ensures the sustainable development of the industry in the long term, aiming to reach the export milestone of 1 billion USD and affirm the position of Vietnamese pepper in the international market.

Mr. Nguyen Van Tam, Director of Vietnam Pepper Export Company said: “The rising pepper price in the market is a golden opportunity for Vietnamese pepper exporting enterprises. We have taken advantage of this opportunity to boost exports and expand the market to new regions such as the Middle East and Africa.”

However, to take advantage of this opportunity, the Vietnamese pepper industry needs to focus on improving product quality, diversifying export markets, applying science and technology to production and developing brands.

“ Currently, the demand for clean and organic pepper is increasing strongly globally, especially in developed markets such as the EU and North America. We have quickly seized this opportunity by investing in the clean pepper production process from farm to processing and packaging. At the same time, we have signed long-term contracts with major retailers in Europe, thereby ensuring stable output for the product .” – Ms. Tran Thi Mai, Marketing Director of Clean Pepper Company Limited said.

The boom of Vietnam's pepper market not only brings great economic benefits but also affirms the position of Vietnamese agricultural products in the international market. Vietnamese pepper will continue to grow, becoming one of Vietnam's key agricultural products in the world market.

Source: https://congthuong.vn/gia-tieu-tang-co-hoi-lon-cho-doanh-nghiep-xuat-khau-332425.html