Pepper prices have been at a high level for nearly 10 years, making pepper growers in Dak Lak very excited. However, when many agricultural products increase their prices as high as today, farmers are not in a hurry to sell pepper.
PEPPER SUPPLY IS IN A SHORTAGE
Since the start of the year, the price of Vietnamese pepper has increased sharply. Especially in the first half of June, it peaked at 180,000 VND/kg on June 12. Many people expect pepper to return to its golden age. However, after the peak, the price has been unstable, fluctuating between 140,000 and 160,000 VND/kg. But it is still considered a record high since 2016.
Pepper prices have been at a high level for nearly 10 years.
Despite the price increase, growers do not benefit much. Most perennial pepper gardens have been replaced by durians and other crops with higher economic value. On the other hand, due to climate change, productivity has decreased sharply in recent years, averaging 20–30%. Currently, productivity and production are greatly reduced, with about 60–70% left compared to before.
Dak Lak now has 28,583 hectares of pepper, down 2,501 hectares compared to 2022. The area for harvest is 27,176 hectares. The pepper area continues to decrease, but productivity and production increase due to the increase in pepper prices.
According to the General Department of Customs, by the end of May 2024, Vietnam had exported nearly 110,000 tons of pepper of all kinds, worth 469 million USD. Compared to the same period last year, pepper exports decreased by 16.8% in volume but increased by 15.4% in value. In the coming time, the price will continue to increase, which will help the pepper industry reach 1 billion USD this year.
The Vietnam Pepper and Spice Association (VSPA) said that prolonged drought led to a 10% decrease in Vietnam’s pepper production this year, to about 170,000 tons compared to last year, the lowest level in the last 5 years. Many major producing countries are forecast to face a decrease in output due to the impact of El Nino and the decline in cultivation area.
FARMERS EXPECT HIGH PEPPER PRICES
Economic experts said that the pepper price will increase, although there may be downward corrections in the short term. The current price is not attractive enough for farmers to sell. Because the prices of durian and coffee are very good, farmers have enough money to store pepper.
Many industry experts believe that the price of pepper in the coming time may exceed the previous peak.
Mr. Pham Van Tuan, Director of Viet Duc Agricultural Cooperative (Cu Kuin district), said that with an area of 50 hectares in the 2024 crop, the total pepper production of the cooperative is nearly 200 tons. This year, pepper prices have continuously increased, but farmers are not under pressure to sell as early as in previous years. Therefore, after harvesting, they only sell part of the output in advance to pay for labor and reinvest for the next crop; the rest is stored, waiting for the price to increase.
Similarly, in Eawy Agricultural Cooperative, members only sell about 50% of the output. Most of them expect the price of 200,000 VND/kg to sell because they have a good income from durian and coffee. Meanwhile, it is easier to store pepper than other agricultural products.
Mr. Vu Kim Thinh (Kim Chau village, Dray Bhang commune, Cu Kuin district) said that with 7 hectares, his family harvested 40 tons of pepper from the recent crop. Despite the high price, his family has not sold it because the inventory from previous years is still available. He has invested in building cold storage to ensure the quality of the pepper.
According to the VSPA, in 2024, global demand is expected to reach 529,000 tons, 64,000 tons higher than production. With the current shortage of pepper supply, many industry experts believe that the price of pepper in the coming time may exceed the previous peak.
The increase in pepper prices in the context of the general increase in the prices of other agricultural products is a good signal. Farmers will not rush to plant pepper as in the past. At the same time, they will have better conditions to take care of their pepper gardens in a sustainable way, adapt to climate change, and increase product value.