Peper exports in 10 months of 2022 reached 192,391 tonnes with a turnover of 837.9 million USD, down 16% in quantity but up 7.4% in value compared to the same period last year. It is expected that in 2022, Vietnam shall export 220,000 tonnes of pepper, with a turnover of 962 million USD, accounting for 55% of the total pepper production worldwide…
Pepper exports have not yet gotten out of difficulties. (Photo: Internet)
In October 2022, Vietnam exported 17,861 tonnes of pepper, bringing in 67.5 million USD; of which: black pepper export reached 16,248 tonnes with a value of 58.6 million USD and white pepper export reached 1,613 tonnes with a value of 8.9 million USD. Compared to September 2022, the export volume increased by 26.8% and the turnover increased by 17.2%.
EXPORTS INCREASED SHARPLY AFTER THREE CONSECUTIVE MONTHS OF DECLINE
After three consecutive months of decline in terms of both quantity and value, pepper exports in October have risen strongly. Previously, pepper exports in September 2022 were only 13.86 thousand tonnes, worth 56.83 million USD, down 25.8% in quantity and 25.3% in value compared to August 2022. In comparison to September 2021, the figures were down 9.1% in quantity and 7.7% in value.
“The US remained Vietnam’s largest pepper export market in October 2022 with 4,320 tonnes, up 19.9% compared to the previous month. Notably, China’s imports increased by 84.5% to 3,921 tonnes compared to September 2022, and this is also the largest import since May 2021 of China (5,048 tonnes). “
According to the Vietnam Pepper Association.
Leading in exports in October 2022 is still Olam enterprises with 2,313 tonnes, Tran Chau with 1,362 tonnes, Phuc Sinh with 1,277 tonnes, etc. Exporters that mainly export to China include Minh Quang Ls: 1,113 tonnes, Hong Phuc Lang Son: 959 tonnes, and Import-Export Logistics: 577 tonnes.
Accumulated in 10 months of 2022, the country exported 192,391 tonnes of pepper, bringing in 837.9 million USD. The average export price of Vietnamese pepper reached 4,414 USD/tonne, up 30.7% compared to the same period in 2021. It is expected that pepper exports in the whole year will reach 220,000 tonnes and 962 million USD.
After five years of losing the one billion USD mark, the pepper industry has not regained this mark yet. Before that, in 2021, Vietnam exported 263,692 tonnes of pepper, with a turnover of 948.7 million USD.
The domestic pepper price from November 15 to 21 has stabilized in the range of 58,000 – 61,500 VND/kg. Regarding the world pepper price, according to an update from the International Pepper Association (IPC), in the last week, Lampung black pepper (Indonesia) was at 3,515 USD/tonne; Brazilian black pepper ASTA 570 was at 2,575 USD/tonne; and Kuching black pepper (Malaysia) ASTA was at 5,100 USD/tonne, without any change.
The Vietnam Pepper Association commented that from October 2022, pepper exports have shown a positive return, but were not as expected. The market continues to decline overall since the demand is affected by China’s “Zero Covid” policy.
Besides, the Russian-Ukrainian conflict has caused high inflation in many countries and the devaluation of the currencies of the importing countries against the USD. In addition to the above factors, Vietnamese pepper is losing market share due to the Brazilian and Indonesian markets have offered more competitive prices.
THE MARKET WILL BE DIFFICULT UNTIL MID-2023
For more than a decade, the Vietnamese pepper industry has experienced ups and downs when there was time it reached a peak of nearly 230,000 VND/kg, however, there was also a time when the price fell to 34,000 VND/kg. Currently, the pepper price is 60,000 VND/kg.
“In Vietnam, the area of pepper is significantly reduced from 152,000 ha in 2017 to 130,000 ha in 2022. The reasons are the sharp decline in prices, and the impact of the pandemic and climate change. The pepper output in 2022 reached 175,000 tonnes, down 10% compared to 2021. However, the production of Vietnamese pepper still ranks number 1 in the world and accounts for 35% of the global”.
According to the Vietnam Pepper Association.
Pepper exports have shown a positive signal but not yet regained the one billion USD mark. (Photo: Internet)
Mrs. Hoang Thi Lien – President of the Vietnam Pepper Association commented: Pepper exports are forecast to encounter many difficulties in the context of the world pepper prices continue to be under downward pressure due to falling demand in many countries, especially China, and the high anchored USD is holding back exports of countries.
“Chinese traders and major pepper exporters in Vietnam are waiting. At the moment, the price of Vietnamese pepper depends on the Chinese market when European and the US importers have signed contracts until the end of this year, ” Mrs. Lien said.
Remarkably, at present, some enterprises exporting pepper to Egypt and Pakistan are struggling with payment. The goods arrived but have been “hung up” for several months, not knowing when to be paid. Enterprises are incurring charges for the storage of containers at warehouses.
“The forecasts indicate that the demand for pepper will decline strongly in the first quarter of 2023 with a particularly difficult winter in the European region, due to the energy crisis that is about to happen. This time coincides with Vietnam’s goods of the new season to the market, thus showing that the picture is not very lively, ”Mrs. Lien said.
In the context of pepper exports encountering many difficulties, Mrs. Lien said that the new generation of Free Trade Agreements (FTAs) brings many benefits to Vietnam, but to better exploit FTAs in the face of the unstable world economic environment is still a difficult problem for enterprises.
Therefore, the role of oversea trade offices is very important in providing market information to enterprises to avoid risks and disputes with partners.
According to Mrs. Lien, to ensure the value of pepper and sustainable development, there is always a need for close cooperation between exporters, processors, and producers. Farmers must be placed in a central position and they need to improve their farming knowledge.
In addition, it is necessary to cooperate with enterprises in the pepper industry, specifically, enterprises should be encouraged to work closely or associate with cooperatives and farmers.
However, according to the assessment of the International Pepper Association, the market picture of the pepper trade is not completely dark. The global black pepper market is estimated to be worth 3,159 million USD by 2021 and it is forecast to scale to 4,184.2 USD million by 2028 with a compound annual growth rate (CAGR) of 4.1% between 2022 – 2028.
The black pepper market is directly influenced by the growing processed food industry. The increase in consumption of bakery, confectionery, instant, and fried food in developed economies is driving the spice market. In parallel, recent trends in the use of natural flavors have also pushed the growth of the global black pepper market.
At the International Conference on the Vietnamese pepper industry in 2022, Mr. Vu Ba Phu – Director of the Trade Promotion Department (Ministry of Industry and Trade) said that in addition to traditional markets, the pepper industry needs to promote exports to markets that are not large of Vietnamese spices such as the Middle East and Africa is a positive direction.
For Vietnam’s pepper products to affirm their position on the world market in a sustainable way, there is a lot of work that the pepper industry is recommended to do by Mr. Phu.
Firstly, increase the ability to conform to international standards, especially on aspects such as chemical residues, and economic, social, and environmental sustainability criteria.
Secondly, apply production management, retrieval, and customer connection technologies for marketing activities.
Thirdly, reorientate the strategy to rebuild the image to increase the presence in key markets, have a detailed strategy, and measure the specific effectiveness of new product development entering premium markets./.