The harsh climate and shrinking farming area may lead to the steepest ever decline in pepper output in the next three years.
On September 28, Vietnam's pepper prices levelled off after two consecutive sessions of decreases. The price hovered around VND69,000–72,000 per kg in the southeast region and VND69,000–70,000 per kg in the Central Highlands.
"The pepper price will increase if farmers continue to replace pepper trees with fruit trees, leading to a shortage of supply," Hoang Thi Lien, chairman of the Vietnam Pepper and Spice Association (VPSA), said. "Output may decline sharply in the next three years because the wave of crop shifting is taking place strongly."
According to the VPSA, there is very little inventory of pepper held by farmers. The majority belongs to wholesalers and speculators. Meanwhile, some processing companies have enough goods to process by year-end, so they don't need to buy pepper at this time.
In September, the Foreign Trade Agency under the Ministry of Industry and Trade also predicted the possibility of pepper exports remaining at a low level due to a lack of domestic supply and dampening demand in the EU and US markets. Currently, Vietnam has run out of pepper for export.
The General Department of Customs (GDC) reported that Vietnam exported 20,137 tonnes of pepper and had an export turnover of $75.3 million in August, up 9 per cent in quantity and 0.2 per cent in value compared with the same period in 2022. The average export price in August was $3,741 per tonne, the highest price since November 2022.
In the last months of this year, businesses will export imported goods and pre-existing inventory. It is estimated that the total amount of inventory and imports is about 80,000 tonnes, while domestic consumption is about 10,000 tonnes. The amount of inventory transferred to next year is about 30,000 tonnes, leaving about 50,000 tonnes for export in the last months of the year, according to the Foreign Trade Agency.
Pepper is the main crop in Vietnam. Currently, the total area of pepper cultivation in the whole country is more than 130,000 hectares. They are mainly concentrated in the southeast region and the Central Highlands, accounting for over 95 per cent of the pepper area nationwide; the rest are scattered in the north central and central provinces.
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