Abundant supply and COVID-19 keep pepper prices low

 The domestic pepper industry is poised to encounter a variety of challenges over the course of the year due to there being an abundant supply of produce, in addition to the negative impact of the COVID-19 pandemic, according to the Agro Processing and Market Development Authority.

March alone saw the country export 33,000 tonnes of pepper with a value of US$70 million, raising the country’s total export volume for the first quarter of the year to 74,000 tonnes with a value of US$163 million, representing a 3.9% rise in volume but a fall of 13.9% in value on-year.

The two months of the year saw the United States, India, Pakistan, Myanmar, and Germany remain the nation’s five largest buyers of local peppers, making up 45.5% of the country’s total pepper export turnover.

The average export price of peppers throughout the reviewed period suffered a year-on-year decline of 17.9% to US$2,305 per tonne.

The nation successfully retained its position as the largest supplier of peppers to the US market in the opening two months of the year, with its pepper market share of total US pepper imports increasing from 57.7% last year to 63% this year.

According to the Department of Import and Export under the Ministry of Industry and Trade, the price of black and white peppers within the domestic market in early April slumped to lows of VND35,500 per kilo and VND57,000 per kilo, respectively.

Despite having large reserves, the nation usually exports peppers in their raw form, resulting in a low value for the domestic industry.

The global pepper market, especially the US and Europe who are the world’s largest pepper consumers, is projected to suffer negatively from the COVID-19 pandemic, leading to a sharp decline in import demand.

Moreover, the global pepper market has also faced a range of hurdles relating to disruptions occurring in supply sources due to the majority of countries worldwide imposing social distancing measures and placing trade restrictions on the customs clearance of goods to prevent the spread of the COVID-19.

Consequently, the global pepper market in the long-term is anticipated to have an abundant supply of goods, according to insiders.

The Department of Import and Export has therefore recommended that, in the context of the COVID-19 pandemic, the domestic pepper industry should upgrade its processing stage as a way of improving product value. Simultaneously, efforts should be made to improve its competitiveness in the global market moving forward.