Pepper exports to recover towards the end of the year

According to international news reports, global pepper exports in the first 10 months of 2022 recorded a decline in most major suppliers due to China's "Zero COVID" policy affecting the demand for pepper around the world, the Russia-Ukraine conflict causing high inflation levels in many countries as well as the devaluation of the importing countries' currencies against the US Dollar. Namely, Vietnam's pepperr exports decreased by 16.3%; Brazil, Indonesia and India exports decreased by 3%, 16.2% and 4.2% respectively.

The General Department of Customs reported that in 10 months, Vietnam exported over 192 thousand tons of pepper, which is valued at 836.94 million USD, a decrease of 16.3% in volume, but an increase of 5.8% in value over the same period in 2021.

Although Vietnam's pepper exports fell sharply in terms of volume during the first 10 months of 2022,  exports in October have had a strong recovery. Vietnam's pepper exports to several major markets in October increased sharply compared to the previous month, with exports to the US reaching 4,319 tons, an increase of 20.8%; exports to the UAE increased by 72.2%, and exports to Germany increased by 33.1%.

According to statistics from the General Department of Customs, the total Vietnam's pepper exports to markets around the world in October 2022 reached 17.6 thousand tons, which is valued at 66.6 million USD, an increase of 26.9% in volume and 17.2% in value compared to September 2022; Compared to pepper exports in October 2021, it increased by 5% in volume, but decreased by 8.2% in value.

The decrease in value compared to October 2021 was due to the fact that the export price of pepper in October was estimated at an average of 3,785 USD/ton, the lowest price recorded since August 2021. The export price of pepper in October decreased by 7.7% compared to September 2022 and by 12.6% compared to October 2021. However, Vietnam's average export price of pepper in the first 10 months of 2022 reached 4,357 USD/ton, which is an increase of 26.4% over the same period in 2021. As a result, the export volume of pepper decreased sharply in the first 10 months of 2022, but the export value increased over the same period.

According to the Import-Export Department under Ministry of Industry and Trade, there are positive signals for Vietnamese pepper at the end of 2022. Namely, China has increased trading after an extended period of strict control. The Vietnam Pepper Association informed that China bought nearly 4,000 tons of pepper from Vietnam in October 2022, which is the highest volume recorded since May 2021.

China is expected to continue its increased purchase of pepper to compensate for the shortage during the extended implementation of the "Zero Covid" policy. Additionally, several other major markets of Vietnam are also boosting imports to serve the year-end holiday season. These factors will have a significant and positive impact on pepper prices.

World pepper prices are also on a rising trend due to year-end increased demand as well as limited supply. According to the latest report by the Kampot Pepper Promotion Association (KPPA), Cambodia's Kampot pepper exports in the third quarter of 2022 reached 57 tons, a decrease of 50% compared to the same period in 2021.

The output of the new crop in the Central Highlands and the Southeast region of Vietnam is forecast to continue its downward trend, accumulating to at least a 10% reduction compared to the previous crop. This is due to the fact that many farmers cut down pepper growing areas or intercrop pepper with other crops, especially durian, which has a more attractive price.

According to Dong Nai Department of Industry and Trade, Dong Nai businesses' pepper export turnover in the first eight months of 2022 reached 20 million USD, an increase of 8.9% over the same period.

Dong Nai currently has 11,900 hectares of pepper with an output of 30,000 tons, accounting for 12.6% of the total perennial industrial crop area in the province. Pepper ranks third in terms of total area in the group of perennial industrial crops in Dong Nai province, followed by cashew and rubber.

A remarkable achievement in pepper production in Dong Nai is the fact that many cooperatives and farmers are developing towards organic production. Namely, Lam San Agricultural Cooperative in Cam My district is linking production with nearly 1,000 farmers, producing clean pepper, organic pepper for export to Germany as well as other European countries with an annual output of approximately 1,000 tons.

Mr. Tran Lam Sinh, Deputy Director of Dong Nai Department of Agriculture and Rural Development, said that Lam San is the first cooperative in Vietnam to directly export organic pepper to Europe, with an average export volume of 600 tons annually.