This year, the prices of pepper and spice are forecast to be high. Improving quality to target the high-end market is a long-term step that businesses are taking.
Currently, many businesses have signed orders with customers in the EU until September 2024. Therefore, they are preparing the source of goods to deliver March orders on time.
The prices of pepper and coffee are expected to be high in 2024. This brings both opportunities and challenges for agricultural exporters. There is a wide and sustainable customer base from all continents of the world. To prepare enough goods to meet both quantity and quality requirements for partners, the businesses have developed a plan to collect raw materials previously.
The market is not all rosy. Businesses are facing high transportation costs and increasing prices of raw materials. From the end of 2023 until now, shipping charges have increased strongly. Even freight to the US and EU markets increased by 100%. With the Middle East market, businesses are affected by the Red Sea problem, causing the freight of some routes passing through this region to double.
Pepper prices are forecast to remain high.
UPGRADE TO GO FURTHER
Of the world’s spices, pepper accounts for a large proportion, playing an important role in cuisines. In particular, pepper products are promoted in pharmaceuticals, cosmetics, and health care. The pepper market size is valued at 5.43 billion USD and an average growth of more than 20% in the period 2024 – 2032 is expected.
Vietnam’s pepper industry accounts for 40% of production and 60% of the world market share. However, according to Mr. Le Hoang Tai – Deputy Director of the Trade Promotion Department, in the current world context, the spice and pepper industry faces many challenges from market fluctuations, geopolitical instability, supply chain disruptions, and rising inflation. The US, EU, and Middle East markets have increased demand for sustainable products. This is a challenge but also an opportunity for exporting pepper and spices.
According to Ms. Hoang Thi Lien – Chairwoman of the Vietnam Pepper and Spice Association, sustainability and comprehensiveness are the two mainstays of the pepper industry in the coming time. In particular, the role of businesses is very important in training farmers in sustainable production so that they do not use pesticides and chemicals.
“Sustainability and comprehensiveness cannot be achieved in a day or two but require a long-term commitment, to creating a sustainable future. Let’s share experiences to achieve sustainability and comprehensiveness”, Ms. Hoang Thi Lien emphasized.
Previously, businesses mainly focused on low-end and mid-end market segments such as India and the Middle East. For the past five years, they have invested in factories with international standard certifications such as BRC, Halal, FDA, ISO, HACCP, Kosher, or FSMA. Through a closed production process from the collection and preliminary processing of qualified raw materials to the production process into high-quality products for export, businesses aim at high-end customers such as the EU and the US.
In addition, businesses are lacking information about the market. Therefore, it is recommended that authorities regularly support. Thereby, we can gradually affirm the world-leading position in pepper production and export./.