Vietnam is not only the world’s largest pepper exporter but also the leading importer and processor. In the first 6 months of this year, Vietnam spent a record amount of nearly 32 million USD to import 8,332 tonnes of pepper from Brazil.
Over the last 10 years, Vietnam has become the world’s pepper production center with state-of-the-art factories. (Photo: Internet)
Every year, a quantity of pepper from Brazil, Cambodia, and Indonesia… is imported to Vietnam for processing and re-export, serving customers who need raw materials from other countries but do not have modern processing systems like Vietnam.
In addition, Vietnam also imports pepper for the production of export orders when domestic supply is at a low level. Therefore, not only known as the world’s largest pepper exporter but Vietnam is also the leading importer and processor.
Meanwhile, one of the problems restricting Brazilian pepper exports today is the presence of Salmonella bacteria. According to EU regulations, in 2022, black pepper from Brazil exported to the EU must be accompanied by a certificate and analysis results of no Salmonella bacteria.
This is believed to be the main reason for the sharp decline in Brazilian pepper exports to strict markets such as Europe and the US. Instead, it is exported to Vietnam for processing and re-export.
According to data from the Brazilian State Center for Foreign Trade Statistics (Comex Stat), in the first 6 months of this year, Brazilian pepper exports reached only 39,922 tonnes, down 17% compared to the same period last year and were the lowest level in 4 recent years.
In particular, Brazil’s pepper exports to the key consumption markets of this country such as the EU, the US, UAE, and Pakistan… have all decreased strongly.
However, Vietnam unexpectedly spent a record amount of nearly 32 million USD to import 8,332 tonnes of pepper from Brazil in the first 6 months of the year, a sharp 83.8% increase in volume and a 2.9-fold increase in value over the same period last year. Thereby, Vietnam became Brazil’s largest pepper importer with a 21% market share compared to 9% in the same period.
Since Vietnam mainly buys raw materials from Brazil for processing, the average import price is only 3,839 USD/tonne, which is significantly lower than Brazil’s export price to other markets.
However, experts said that the import of pepper from Brazil does not cause many worries because the import quantity is small compared to the size of the Vietnamese pepper industry, while prices are also difficult to compete with domestic pepper.
The price of pepper imported from Brazil amounts to nearly 90,000 VND/kg while the price of domestic pepper fluctuates between 70,000 – 80,000 VND/kg.
According to the Vietnam Pepper Association (VPA), since 2020, the EU has conducted an ethylene oxide (ETO) scan across Europe. In spice products, ETO is used to reduce Salmonella bacteria.
In the first 6 months of 2022 alone, there are 41 shipments involving ETO and Salmonella out of 42 cases reported by Europe. Remarkably, up to 40 cases of Salmonella reported were from Brazilian black pepper.
In the US, the US Food and Drug Administration (FDA) is also conducting a large-scale investigation into outbreaks of Salmonella.
According to the VPA, although no reports of Salmonella and ETO-related pepper products have been found in the US, this can be considered a warning to businesses exporting food and agricultural products to the US before this country takes tougher and larger-scale measures.
In that context, some suggested that the Brazilian pepper industry, the second-largest pepper supply market in the world, is at a disadvantage due to Salmonella bacteria. This is an opportunity for Vietnam to increase its market share in international markets. Vietnam’s pepper market share in the US and the EU has also been increasing.
However, others suggested that the Brazilian pepper industry would compete strongly with Vietnam if this country changed its processing technology in the coming time.