Pepper exports face hurdles in global market

Vietnam’s pepper exports are poised to continue to encounter a number of difficulties as a result of low prices due to high levels of supply and increasing competition within the global market, according to the Import-Export Department under the Ministry of Industry and Trade.

At present, Vietnam is home to approximately 100,000 hectares of pepper, equivalent to an annual output of roughly 247,000 tonnes. While pepper prices remain low and pepper production costs have soared in recent years with a 10 per cent rise in comparison to 2017.

In 2018, the falling pepper prices negatively affected the pepper industry with the downward trend set to continue into the future, according to the Ministry of Agriculture and Rural Development.

The global demand for pepper currently stands at approximately 510,000 tonnes per year with an average annual increase of between 2 per cent to 3 per cent, while global pepper output is currently far higher at between 8 per cent and 10 per cent.

The world’s pepper output reached 557,000 tonnes in 2018 and is predicted to reach 602,000 tonnes by the end of the year.

Moreover, global pepper output is projected to rise to 1 million tonnes by 2050 due to growing demand throughout the world, resulting in fluctuations occurring in pepper prices in the coming time.

According to experts in the sector, despite pepper exports facing challenges, free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) are considered to present a wealth of opportunities for the nation’s pepper industry.

The Import-Export Department stated that in order to take full advantage of the benefits brought about by both the CPTPP and the EVFTA, local businesses must stay active in seeking information regarding the FTAs in order to firmly grasp the commitments that exist between Vietnam and partner markets.

This is particularly true when it comes to information related to tariff preferences, quality requirements, and rules of origin.

In order to initiate the raise of pepper prices, the sector has been advised to innovate its growth model and focus on quality from the raw material stage as a way of creating high-quality products which can make inroads into various demanding markets throughout the world.