Viet Nam farmers worried as pepper price plunges

The price of pepper, which Vietnamese farmers call ‘black gold’ as it brings billions of dollars of export turnover each year, has fallen dramatically.

The pepper price has fallen dramatically

“It is now the most difficult period for Vietnam’s pepper,” said Nguyen Nam Hai, chair of the Vietnam Pepper Association.

The pepper growing area in Vietnam increased by three times in the last five years to 153,000 hectares, while the world price dropped from $10 to $2 per kilogram.

Pepper is no longer on the list of export items with export turnover of $1 billion and more. According to the Ministry of Industry and Trade (MOIT), the 8 percent increase in export volume in 2018 could not offset the price fall of 37.3 percent compared with the year before.

According to Hai, the pepper price in the world market is hovering around VND43,000 per kilogram, while the production cost in Vietnam is VND50,000. This is attributed to the hot development in pepper cultivation.

Pepper is no longer on the list of export items with export turnover of $1 billion and more. According to the Ministry of Industry and Trade (MOIT), the 8 percent increase in export volume in 2018 could not offset the price fall of 37.3 percent compared with the year before.

Once the pepper price reached its peak of $10,000 in 2014, one hectare of pepper could bring turnover 5.2 times higher than one hectare of coffee, 5.6 times higher than rubber and eight times more than tea. This prompted farmers to chop down other crops to reserve land for pepper gardens.

Tuoi Tre newspaper in 2014 published an article about the ‘pepper rush’ in Gia Lai, where the pepper growing area exceeded 10,000 hectares, much higher than the 6,000 hectares planned for 2020.

According to Hai, Brazil reported total pepper output of 35,000 tons in 2013 and 85,000 tons in 2018. As for Vietnam, the figures were 134,000 tons and 250,000 tons, respectively.

In 2013, Vietnam only had 52,000 hectares of pepper growing area, while the figure rose to 152,000 hectares in 2018. 

In 2018, the total pepper export volume all over the world was 388,000 tons, while Vietnam alone exported 245,000 tons, or 60 percent of the world’s exports.

After reaching its peak in 2014, the world’s pepper price began sliding. Currently, it is traded at $2,000 per ton, a fivefold drop within five years.

Commenting about the ups and downs of the pepper industry, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said this is typical of agriculture in Vietnam, in which “production doesn’t match consumption”.

Farmers, after the ‘pepper rush’, are now considering chopping down pepper plants to grow other crops. The same decision happened with rubber in the past.