Vietnam’s pepper export price in 2022 is forecast to remain high
Despite being negatively affected by a labor shortage and high sea freight costs, Vietnam’s pepper export in 2021 still recorded positive growth. In 2022, pepper export price is forecast to remain high, which positively affects the industry.
In 2021, pepper export increased by 42% in value.
(Fresh Pepper Corn in Daknong province, Vietnam crop 2022)
The Import-Export Department (Ministry of Industry and Trade) estimated that Vietnam’s pepper export in December 2021 reached 15,000 tons, worth US$71 million, down 8.4% in volume and 7.1% in value against November 2021. In comparison to December 2020, the figure increased by 22.9% in volume but decreased by 8.5% in value. For the whole year of 2021, Vietnam’s pepper export was estimated at 261,000 tons, worth US$938 million, down 8.5% in volume, but up 42% in value compared to 2020.
The average export price of Vietnam’s pepper in December 2021 reached US$4,703 per ton, up 1.5% compared to November 2021 and sharply up 69.9% compared to December 2020. For the whole year of 2021, Vietnam’s average export price of pepper reached US$3,593/ton, up 55.2% over the same period in 2020.
In 2021, Vietnam’s pepper export made a move in market structure. The proportion of export to the US, EU, United Arab Emirates, and Pakistan markets increased, while the proportion of export to China and ASEAN markets decreased sharply. In the first 11 months of 2021, Vietnam’s pepper export to many markets increased in both volume and value, including the United States, the United Arab Emirates, Germany, Pakistan, the Netherlands, South Korea, and the United Kingdom. In contrast, Vietnam’s pepper export to India, the Philippines, and Egypt fell sharply.
The structure of export pepper categories in 2021 had a big change. Enterprises reduced the export of raw pepper and increased pre-processed or intensively processed varieties. In addition, the pepper industry promoted the export of products serving the cosmetic industry. In the complicated context of the Covid-19 pandemic, people are advised to limit large gatherings, causing the demand for pepper consumption as a seasoning for dishes at restaurants and hotels to decrease.
According to the Vietnam Pepper Association (VPA), Vietnamese pepper not only grows in value but also continues to affirm its leading position in global pepper export output by being a supply to 60% of global pepper consumption demand. The quality of pepper has been increasingly improved, and the structure of export categories has gradually switched to pepper with high processing content instead of raw export as before.
Notably, 2021 has marked a strong recovery of this industry in the domestic market when the price of this item has increased by 40-44% from 51,000 to 53,000 VND/kg, from mid-February to 76,000 – 79,500 VND/kg, and recorded the peak price of 90,000 VND/kg at the end of October 2021, the highest level since the end of 2017.
Optimistic forecasts for 2022:
(Vietnam White Pepper, Black Pepper, Red Pepper Green Pepper & Sichuan Pepper)
Regarding the prospect for 2022, most experts, exporters, and pepper growers share the same expectation that the price of this item will continue to increase because pepper supply-demand is gradually returning to balance. There may even be a shortage if the production situation is not favorable.
According to the World Pepper Association (IPC), Brazil is currently the only country with increased supply due to the harvest in the north of this country, while other countries are in short supply. News about the new crop of Vietnam is not very positive, which may cause customers to switch to buy more Brazilian pepper due to better freight rates. Meanwhile, the demand for pepper in India improved when the economy reopened after a long time affected by the Covid-19 pandemic. The price of pepper has increased sharply in recent times, leading to farmers and agents in primary markets keeping their goods from selling with the hope that the price will increase further. Therefore, the supply in the market has been affected.
According to the Import-Export Department, pepper export price in 2022 will remain high, which positively affects the industry. The pepper industry continues to exploit traditional export markets such as the US, EU, and the United Arab Emirates. In the United States – the largest pepper export market of Vietnam, the recovery of the economy will lead to an increase in pepper consumption demand. Meanwhile, Vietnam’s pepper has created a fairly solid position in the US market. The competitive advantage of Vietnam’s pepper products compared to other export markets is quite large. Although the US increased pepper imports from some producing countries such as Indonesia, India, and China, the import volume from these markets was low.
VPA believes that the pepper export in 2022 will increase sharply in the first quarter of 2022 with the global purchasing demand estimated at 130,000 – 160,000 tons, while the total output of Vietnam is only about 150,000 tons a year. VPA also forecasts that pepper price will continue to increase this year because supply and demand are gradually returning to balance.
Experts said that to maintain a high price in the following years, controlling the increase in supply is one of the key factors. Besides, farmers need to change their production methods towards clean, safe, and improved product quality.
Although leading in global pepper exports, up to now, Vietnam’s pepper has not been popular in many markets. Therefore, branding is also something that the pepper industry needs to focus on in the upcoming time. Moreover, there are significant demands about White Pepper Powder, Black Pepper Ground and pesticide guarantee products from the world. That is the chance for manufacturers to improve the pepper products and services for the long terms.