In 2022, global pepper demand decreased due to high inflation and China’s “Zero COVID” policy. However, the price of pepper in 2022 was higher than in 2021, causing an increase in the value of imports from many markets. In 2023, it is forecast that pepper exports will face many difficulties due to world market fluctuations. Facing this situation, the Import-Export Department believes that the industry needs to strengthen deep processing and create new products to increase competitiveness.
According to estimates by the Ministry of Industry and Trade, Vietnam’s pepper exports in 2022 reached 226,000 tonnes, worth 963 million USD, down 13.3% in volume, but up 2.7% in value compared to 2021. Vietnam’s average export price of pepper in 2022 was estimated at 4,257 USD/tonne, up 18.5% compared to 2021.
The Ministry of Industry and Trade said that in the first 10 months of 2022, pepper imports of German, British, and French markets from Vietnam increased by 19.8%, 59.5%, and 31.5%, respectively, reaching over 53 million USD, 32.68 million USD, and 23.34 million USD. Vietnam’s pepper market share in the total import value of the German, British, and French markets was high, respectively at 45.52%, 54.14%, and 40.39% in 10 months of 2022.
Vietnam’s pepper exports are forecast to face many challenges in the upcoming time.
In the short term, pepper imports of the German, British, and French markets are forecast to remain at a low level. Europe is facing an energy crisis that has caused high inflation and economic decline. In the long term, the demand for pepper in Europe will increase again when energy issues and inflation are resolved, which will have a positive impact on Vietnam’s pepper industry.
The EU-Vietnam Free Trade Agreements (EVFTA) and the UK-Vietnam Free Trade Agreement (UKVFTA) will help Vietnam’s pepper industry create a more competitive advantage over countries that have not yet signed the agreements. To make good use of this potential market, Vietnam’s pepper industry needs to build and develop production areas, comply with agricultural practices and international standards; strengthen control and minimize the use of pesticides in pepper production. These can help create pepper products meeting the requirements of the European market.
Particularly for the Chinese market, according to statistics from Chinese Customs, in 10 months of 2022, the value of Chinese pepper imports from Vietnam reached 11.6 million USD, down 20.2%. However, Vietnam’s pepper market share accounted for 32.11% of China’s total import value in 10 months of 2022, higher than 31.76% in the same period of 2021.
Farmers are picking up pepper.
It is forecast that in 2023, Vietnam’s pepper exports will continue to face difficulties in the context of world prices under the pressure of low demand. Pepper demand will fall sharply in the first quarter of 2023 with a very fierce winter in the EU due to the energy crisis. China’s demand for pepper imports has not been able to make a strong breakthrough although China has loosened the “Zero Covid” policy. It is expected that by the beginning of the second quarter of 2023, the purchasing power of the Chinese market can increase again.
Therefore, according to the Import-Export Department, Vietnam’s pepper industry needs to increase its ability to meet international standards, especially in terms of chemical residues, and sustainable production criteria of economic, social, and environmental. In addition, it is necessary to promote deep processing and create new products that help increase competitiveness in the world market./.