The pepper and spice industry has contributed to the export turnover of more than 1.4 billion USD in 2022.

At the seminar “Commence a journey to make Vietnam a sustainable multispice origin” organized by the Vietnam Pepper Association in collaboration with some units on April 21, Ms. Hoang Thi Lien, Chairwoman of the Vietnam Pepper Association, said that the export of pepper and spices is forecast to reach 2 billion USD by 2025.

An image of the seminar “Commence a journey to make Vietnam a sustainable multispice origin”.

More analysis of this statement, Ms. Hoang Thi Lien said, currently, pepper and spice exports have reached 1.4 billion USD. In the current context, the above figure may be a bit ambitious, however, when the market returns to what it was before the COVID pandemic, the growth rate of this industry is quite good. Pepper exports used to reach 1.1 billion USD. When demand is high and the supply is scarce, there will be pressure on prices. As a result, the expectation of 2 billion USD can be seen. Besides, the production process is getting more and more standard, organic production is increasing and prices will be better.

Mr. Le Viet Anh, Chief of Staff, Vietnam Pepper Association, said that the pepper crop in Vietnam in 2023 is relatively positive. The harvest output is estimated at 200,000 tons which is up 9.3% compared to last year. Meanwhile, according to the International Pepper Community (IPC), harvest output from other countries such as Brazil, Indonesia, and India is forecast to decrease compared to 2022.

The total global pepper production in 2023 is estimated at 526,000 tons compared to 537.6 thousand tons in 2022. Vietnam’s cinnamon production in 2023 is forecast to increase compared to 2022 and is estimated at about 45,000 tons.

According to Mr. Le Viet Anh, geopolitical factors may be the main cause of price uncertainties rather than supply and demand. Strict requirements and regulations of import markets on non-tariff barriers continue to increase, especially issues related to pesticide residues and heavy metals. But the positive signal is that the perception of sustainable farming and trade will be increasingly improved.

The pepper and spice industry contributed to a turnover of more than 1.4 billion USD in 2022. Pepper accounts for 69.4%, cinnamon 20.6%, star anise 5.1%, cardamom and nutmeg 2.3%, ginger and turmeric 1.6%, chili 0.8%, etc.

According to the report of the Vietnam Pepper Association, in the first quarter of 2023, Vietnam exported 76,727 tons of pepper with export turnover reaching 235.9 million USD. This result is up 40.5% in quantity but down 7.3% in value compared to the same period last year. Along with that, cinnamon exports reached 18,685 tons with 54.8 million USD, up 45.8% in quantity and 13.8% in value. Star anise exports reached 3,369 tons with 21.6 million USD, up 261.9% in quantity.

Vietnam is one of the major producers and exporters of pepper and spices in the world, of which exports account for about 11% of the global market share in 2022. Some of Vietnam’s spices such as pepper, cinnamon, star anise, etc are at the top positions and account for a large import market share in the US, EU, China, India, and the Middle East.

Pepper and spices exports are forecast to reach 2 billion USD by 2025

However, import markets have recently warned about pesticide residues as well as increased the frequency of control over agricultural products including Vietnam’s spices. Therefore, it is very necessary to support enterprises to access information on the market and industry situation and understand the regulations of Vietnam’s state management agencies as well as the importing country.

Taking an example of chili, Mr. Le Nhat Thanh, Director of the Center for Plant Quarantine After Import I under the Plant Protection Department said that this product is mainly exported to Malaysia and China. Although each market has different detailed regulations on standards, in general, all planting areas are required to have codes, good agricultural practices (GAP), and be recognized. Planting areas and packaging facilities must be registered with competent authorities. Products must ensure that pesticide residues do not exceed the regulations of the import market.

Representatives of IDH Vietnam assessed that the biggest challenge for pepper exports is pesticide residues while cinnamon exports are heavy metal residues. In addition, environmental challenges such as reducing carbon emissions, encouraging sustainable farming or intercropping models, etc. Social challenges such as child labor or gender equality labor are also important. IDH Vietnam will accompany the association and units in the public-private partnership group to solve the difficulties of the pepper and spice industry.

Ms. Hoang Thi Lien shared: To make Vietnam a sustainable multi-spice exporter not just pepper, cinnamon, and anise, we need to create synergy and position as a spice country in the global market. This requires the pepper and spice industry to develop sustainably. Therefore, all members of the chain must go together, build a brand, and promote the competitiveness of the industry./.