Pepper export value drops under 1 billion USD

Hanoi (VNA) – Vietnamese farmers and businesses are worrying as pepper export revenue is expected to drop to under 1 billion USD in 2018 for the first time after four years despite strong increases in shipments.

Illustrative image (Photo: VNA)

Vietnam has held the position as the world’s biggest pepper exporter for 18 years, selling its pepper to more than 100 countries and territories worldwide. Shipment volume increased from 50,000 tonnes in 2001 to over 200,000 tonnes at present, making up more than 60 percent of the total pepper trade volume globally.

Export revenue from the product surpassed 1 billion USD for four consecutive years: 1.2 billion USD in 2014, 1.26 billion USD in 2015, 1.42 billion USD in 2016 and 1.12 billion USD in 2017.  

However, world pepper prices have been declining, resulting in falling revenues for Vietnam in spite of increases in shipments to most markets. 

Between January-November, Vietnam had shipped abroad some 220,000 tonnes of pepper for 718 million USD, up 8.9 percent in volume but down 32.5 percent in value year-on-year, the Ministry of Agriculture and Rural Development reported. 

The US, India and Pakistan remained Vietnam’s major pepper importers, with their market shares standing at 19.6 percent, 8.2 percent and 4.3 percent, respectively, the ministry said. Export volume to all the three markets showed remarkable increases, with 29.4 percent for India, 11.1 percent for the US and 21.9 percent for Pakistan.

Meanwhile, earnings from most markets contracted compared to last year, with the biggest reduction (57.5 percent) recorded in the United Arab Emirates (UAE).

In the 11-month period, Vietnamese pepper was sold at the price of about 3,264 USD per tonne, down 37.9 percent as compared with the same period last year. 

However, local farmers and businesses are hoping that the price will go up in the time ahead thanks to diminishing oversupply.  

According to the International Pepper Community (IPC), the world’s total pepper output in 2019 is expected to reach 492,200 tonnes, down from 523,400 tonnes in 2018. 

In Vietnam, prolonged torrential rains triggered floods that killed hundreds of hectares of pepper. 

Nevertheless, strong increases in global prices would not be possible as Brazil is entering a new harvest.

The Vietnam Pepper Association (VPA) said to raise pepper price, the only way is to improve product quality. 

During the 2018-2019 crop, Vietnam has about 100,000 hectares of pepper, with each ha producing about 2.47 tonnes, said Nguyen Mai Oanh, VPA Vice President and General Secretary. 

Local farmers have paid more attention to cultivation and production standards in order to produce clean products. As many as 20 big firms have invested in pepper processing plants using high technologies, with total capacity of 60,000 – 70,000 tonnes, which meet GMP or other international standards.

The Agro Processing and Market Development Authority suggested businesses join hands with farmers in order to create sustainable sources of materials and stop the abuse of pesticides and chemical fertilizers, thus helping regain the Vietnamese pepper sector’s position in the world market.