Pepper exports explode above US$850m on continued demand

Update: 10/21/2013

HCM CITY (VNS)  — Viet Nam, the world’s largest pepper exporter, is expected to export 130,000 tonnes of pepper worth US$850 million this year, up $50 million from last year, according to the Viet Nam Pepper Association (VPA).

Speaking at a conference in HCM City yesterday, Do Ha Nam, VPA’s chairman said the country shipped 113,962 tonnes of pepper for a value of $755 million in the first nine months of the year.

Both prices and demand have been stable in the period, Nam said.

Do Trung Binh of the Institute of Agricultural Science for Southern Viet Nam quoted the International Pepper Community as saying that the global pepper output this year would be about 315,000 tonnes, while demand would rise by 5 per cent from 310,000 tonnes last year.

“If you calculate local demand from pepper-producing countries, the pepper supply is much lower than demand, which has kept prices high in both local and foreign markets,” he said.

Pepper is one of the country’s key agricultural exports, said Nguyen Trong Thua, director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

The growth of the pepper industry has improved the incomes of thousands of farmers, he said.

“But the pepper industry still faces many challenges,” he added.

“The current high prices of pepper have caused farmers to rush to plant trees, making it hard to control disease,” he said, adding that the excessive use of fertilisers in certain areas also threatened sustainable development of the sector.

Nam said the country has about 60,000ha under pepper cultivation, 10,000ha higher than the zoning plan until 2020 set by the Ministry of Agriculture and Rural Development.

Despite higher cultivation areas, pepper outputs each year have fallen due to the impact of disease and unfavourable weather, he said.

Despite being the world’s biggest pepper exporter, Vietnamese pepper is exported mostly as a raw product at low prices and with no brand name, the conference heard.

Nam said the sector should invest more in technologies to diversify products and improve quality, and develop brand names.

Conference attendees also called for a reduction of fertilisers and pesticides and told farmers to apply advanced production techniques to ensure food hygiene and safety.

They said that local governments should warn farmers that they should not plant pepper in unsuitable places.

Binh said that Good Agricultural Practices in pepper farming would satisfy strict requirements set by importing countries.

Future forecast

“Global pepper demand will remain high next year, while supply will be virtually unchanged or slightly increase,” Nam said, noting that pepper prices will remain high through next year.

However, according to IPC, from 2015 onward, global pepper output is projected to go up, and prices may fall.

Vietnamese pepper is exported to more than 80 countries and territories, with the EU, Asia and the US being the largest importers. In Viet Nam, pepper is grown mainly in the provinces of Binh Phuoc, Gia Lai, Dak Lak, Dak Nong, Dong Nai and Ba Ria-Vung Tau. — VNS


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