Pepper prices spiral downwards

A farmer is seen working in a pepper garden. Pepper prices have fallen dramatically after reaching a record high of VND220 million per ton – PHOTO: PHU LI

Pepper prices have fallen dramatically after reaching a record high of VND220 million per ton, which encouraged farmers to rush into pepper cultivation, reported VnEconomy news website.

Data from the General Department of Vietnam Customs indicated that the export price of pepper averaged US$3,379 per ton in the first seven months of this year, dropping by a staggering 40% year-on-year.

The price slump was reportedly attributed to a decline in global pepper prices, from VND200,000 per kilogram at the beginning of last year to VND70,000 per kilogram by the end of 2017. The decline continued this year, reaching some VND47,000-49,000 per kilogram.

The export prices of black and white pepper, registered at Saigon Port, reportedly fell in July, causing the export price over the first seven months of the year to reach an estimated US$3,379 per ton on average, US$51 per ton lower than the export price in the first half of 2017, marking a 61.5% year-on-year decline.

The International Pepper Community predicted that pepper prices will keep fluctuating until the end of the year as the demand in the global market is unlikely to increase. Meanwhile, the Agro Processing and Market Development Authority has proposed enterprises proactively utilize the country’s advantage of being a major pepper supplier in the world and map out plans to raise the export price of pepper.

According to the Department of Crop Production, the country’s land area under pepper cultivation has expanded sharply since 2010. Vietnam had a mere 51,500 hectares under cultivation in 2010, some 85,600 hectares in 2014 and 152,668 hectares by the end of 2017, up by 196.3% against 2010.

The Ministry of Agriculture and Rural Development plans to have the total pepper acreage of 50,000 hectares until 2020, with a vision toward 2030. The pepper cultivation area in the country is currently triple the initially planned area.

The pepper output is expected to amount to 230,000 tons in 2018, a significant increase compared with the output of 210,000 tons in 2017 and 175,000 tons in 2016.

Expansion of the pepper acreage in Vietnam contributes to the increase in the global pepper plantation area. In 2010, 443,881 hectares of land worldwide were under pepper cultivation, but the figure rose to 518,823 hectares in 2015, up by around 75,000 hectares against 2010, with major areas of cultivation seen in Vietnam.

Nguyen Xuan Cuong, minister of Agriculture and Rural Development, however, said that the expansion of pepper acreage has gone unchecked in recent years, possibly resulting in a negative influence on the pepper sector.

He suggested restructuring the sector, including not expanding pepper cultivation areas, reducing the cultivation areas in some unsuitable regions and not growing new pepper trees on farms that have dead trees. The ministry should focus on researching and improving the quality of pepper breeds, Cuong added.