Experts in the spice business forecast that the pepper price in the upcoming time may lose 60,000 VND/kg and gradually down to 50,000 VND/kg under the pressure of low demand and uncertainties in the world’s economic-political situation.
Will the pepper price continue to go down?
In the early days of October, domestic pepper prices continued to fall sharply to 60,000 VND/kg, in the context of falling exports and the market is showing signs of recovering capital for new season production.
Accordingly, on October 8, the black pepper price in the domestic market decreased by 2,500 – 3,000 VND/kg (depending on the survey area) compared to September 30, to the lowest level of 60,500 VND/kg in Gia Lai; the highest level of 63,500 VND/kg in Ba Ria – Vung Tau province; other survey areas around 62,000 – 62,500 VND/kg. If compared to the beginning of the third quarter, black pepper prices fell by about 16%.
Inflationary pressures and declining consumer demand are believed to be the main causes of the sharp decline in pepper prices in the third quarter.
The Export-Import Department forecasts that world pepper prices continue to be under downward pressure due to falling demand in many countries, especially China. The highly anchored USD is holding back exports from other countries.
Experts forecast that pepper prices in the coming time can lose 60,000 VND/kg and gradually down to 50,000 VND/kg under the pressure of low demand and uncertainties about the economic and political situation in the world.
The pepper market is under the pressure of high inflation causing demand to fall. In addition, pepper exports to China, one of Vietnam’s largest pepper markets, fell sharply as a result of COVID-19 prevention policies.
Currently, Chinese traders and major pepper exporters in Vietnam are waiting. Vietnam’s pepper prices depend on the Chinese market since European and American importers have signed contracts by the end of the year.
On the other hand, China’s increased disease control at border gates with Vietnam also makes it impossible for large quantities of small-scale exported pepper to enter this market.
According to the data of the General Department of Customs, in September, Vietnam’s pepper exports decreased for the third month in a row, reaching 13.86 thousand tonnes, worth 56.83 million USD, down 25.8% in volume and 25.3% in value compared to August; down 9.1% in volume and 7.7% in value compared to September.
Overall, in the first 9 months of 2022, Vietnam’s pepper exports reached 174.53 thousand tonnes, worth 770.44 million USD, down 18% in volume, but up 7.1% in value compared to the same period in 2021.
In particular, pepper exports to the Chinese market decreased by 69% compared to the same period last year to 11,820 tonnes. Currently, Vietnam is the second-largest pepper supplier for China, accounting for 31.4% of the market share, after Indonesia.
Will the pepper price continue to go down? (Photo: Internet)
Competitive pressures from Brazilian low-price pepper and large inventories
Currently, Vietnam’s inventory is estimated at 80,000 – 100,000 tonnes. The Export-Import Department (Ministry of Industry and Trade) identified that this quantity is quite high in the context of falling exports.
In addition, the supply of rival countries is also trending upward. In September, Brazil’s pepper exports, the world’s second-largest exporter of pepper (after Vietnam), increased 34% compared to July to 8,063 tonnes, according to data from the Brazilian State Foreign Trade Statistics Center (Comex Stat). At the same time, this is the second month in a row when this country’s pepper exports increase.
Brazil’s pepper exports have risen in recent months in the context of a deep decline in pepper prices and become more competitive compared to other suppliers.
Typically in the Chinese market, the amount of money that this country spent to import Brazilian pepper in the first 8 months of this year increased by 28.6% to 3.5 million USD. For Vietnam, the pepper export turnover to this market went down by 20% in the same period to more than 30 million USD.
In September, Brazil’s export pepper price was around 2,600 USD/ kg, down 25% compared to August. At the same time, the export price of Vietnamese pepper averages about 4,099 USD/tonne. Earlier, in August, Brazilian pepper prices also declined by 11%.