The impact of the conflict in Eastern Europe, rising oil prices, high economic inflation…has caused the global demand to decrease, the import of pepper and spices of countries to decrease… These are challenges for Vietnamese pepper exports in the past time…
In the first 6 months of 2022, Vietnam exported more than 125,000 tonnes of pepper. (Photo: Internet)
At the recent consultation session “Spices exports to the Middle East-Africa market”, Mr. Le Viet Anh, Chief of Office of the Vietnam Pepper Association, said that Vietnam is the world leader in pepper exports, ranking third in terms of cinnamon and star anise exports.
THE VOLUME OF EXPORTS DECREASED BUT PRICES INCREASED
It is estimated that the production of Vietnamese pepper in 2022 will reach 175,000 tonnes, down 10% compared to 2021. Vietnamese pepper production is also the world leader and accounts for 35% of the global market share.
According to statistics of the Vietnam Pepper Association, in the first 6 months of 2022, Vietnam exported more than 125,000 tonnes of pepper, with a total turnover of nearly $570 million. Compared to the same period last year, the volume of pepper exports decreased by over 19%, but due to the increase in export prices, the value of export turnover increased by 13.5%. Vietnamese pepper in the first 6 months of the year accounted for 55% of the global market share.
The largest market for Vietnam’s pepper export is Asia (accounting for 44% of the market share), followed by the Americas (26.4%), Europe (23.9%), and Africa (5.3%). However, compared to the same period last year, the imports of pepper from these markets decreased.
Among Vietnam’s 20 main pepper export markets, the US is the largest export market reaching 30,109 tonnes (down 8% compared to the first half of 2021), followed by UAE, India, and Germany markets… Imports reduced in China, the UK, Russia, France, Pakistan, Egypt, South Africa… Only a few markets have increased imports such as Germany, the Netherlands, India, and South Korea…
Particularly in the Middle East, in the first 6 months of the year, Vietnamese pepper accounted for 14.5% of the market and 5.9% of the market in Africa… All decreased compared to the same period in 2021.
It is gratifying that, despite the decrease in export output to other markets, export prices tend to increase. However, in the last 2 months, due to the impact of the Russia-Ukrain conflict as well as high inflation in some countries, export prices are falling again.
DIFFICULTIES ARE ACCUMULATING
According to Mr. Le Viet Anh, the challenges for Vietnamese pepper exports in the past time are the impact of the conflict in Eastern Europe, rising oil prices, economic inflation… causing global demand to decrease. As a result, the imports of pepper and spices were reduced.
An image of the Vietnamese spice industry should be built on digital media channels and international social networks. (Photo: Internet)
The Chinese market pursues a tough zero Covid-19 policy, so from a second-largest pepper importer in the world from 50-60,000 tonnes/year, in the first 6 months of 2022, the country only imported about 6,000 tonnes… This is a huge decline.
In addition, climate change is complicated, making it very difficult to grow and produce pepper and spices. Also, the situation of harmful pests, crossbreeds but no purebred breeds… is greatly affecting the production.
Another challenge is the increasing technical barriers of special markets in Europe and the US. Required pesticide residues are constantly at lower levels, making it difficult for businesses.
On the other hand, the high price of inputs such as fertilizers, labor, freight rates, and fuel… affects the profits of enterprises and farmers.
Moreover, there is increasing competition between producing countries such as Brazil, Indonesia, and Cambodia due to the quality of pepper in these countries rising strongly. In addition to the quality, the export freight rates of these countries are also more competitive than Vietnam.
The final difficulty is the lack of information on market demand as well as policy changes in importing countries, especially in Africa.
In February 2022, when Egypt changed its import policy, all imports into the country were forced to open L/C. But Vietnamese enterprises were not aware of this change, so when the goods were sent to the country, they were stuck for 2-3 months.
“Up to this time, some enterprises said that they have a lot of containers in Egypt. It is not known when customers pay because the country lacks foreign currency to open L/C, bank manpower lacks… Therefore, Vietnamese enterprises have to wait in line”, the representative of the Vietnam Pepper Association said.
To maintain the pepper export position, Mr. Le Viet Anh said that the sector has developed an international communication project to develop sustainable markets for Vietnamese pepper and spices in the period 2022-2025 in the US, the EU, and the Middle East.
This project will introduce the Vietnamese pepper and spice processing industry in specialized journals in target markets; participate in Gulfood, Anuga, American Spice Trade Association fairs… These shall build an image of the Vietnamese spice industry on digital media channels, and international social networks…