Pepper price forecast to be around VND 70,000/kg by the end of this year

After a significant increase in October, pepper prices in key pepper growing provinces tend to increase strongly in the early days of November. According to experts, the current price of pepper in Ba Ria - Vung Tau, Binh Phuoc, Dak Lak, Dak Nong and Dong Nai is at VND 56,000 - 58,000/kg.

According to Mr. Hoang Phuoc Binh, Vice Chairman of the Chu Se Pepper Association (Gia Lai), the current pepper prices do not bring many profits due to high production costs and decreased productivity and production. Speculators are not interested in the current selling price either. Therefore, in key pepper growing areas, although prices are increasing, many do not want to sell.

That’s why despite the fact that some domestic and foreign enterprises are still looking for ways to buy pepper at low prices, it will continue to increase, especially in the context of the significantly decreased output. “This year, I have repeatedly surveyed the pepper planting in key provinces and found out that the area of ​​pepper being harvested has decreased quite a lot because of the disease or because farmers did not give adequate care due to prolonged low price. It is estimated that only about half of the area of ​​pepper is being harvested. It is likely that pepper output in 2021 will continue to decline sharply”, said Mr. Binh.

Vietnam accounts for 60% of the world pepper production. Therefore, a sharp decrease in pepper output in Vietnam will also have a significant impact on global pepper output. Besides Vietnam, pepper output in some major producing countries also decreased. For example, according to the Malaysian Pepper Commission (MPB), the country's pepper output in 2020 will decrease by about 4,000-5,000 tons compared to 2019, down to 30,000 tons.

Meanwhile, year-end consumer demand tends to increase. The Import and Export Department (Ministry of Industry and Trade) said that China will increase the amount of pepper purchased after many months of low import volume.

Given this context, Vietnam's export pepper prices are increasing. Statistics from the Import and Export Department show that the average export price of pepper in October 2020 is estimated at US$2,526/ton, up 0.9% compared to September 2020 and 4.6% compared to October 2019.

In addition to the sharp drop in output, the increase in purchasing and export demand, there will be more positive signs in domestic pepper prices. Accordingly, by the end of this year, it is likely that pepper prices will rise to about VND 70,000/kg, said Mr. Binh.

According to the Import and Export Department, pepper exports in October 2020 was estimated to reach 19 thousand tons, worth US$48 million, up 11.9% in volume and 17.1% in value compared to October 2019. However, in the first 10 months of 2020, pepper exports decreased by 4.6% in volume and 15.2% in value over the same period in 2019, reaching 239 thousand tons, worth US$ 537 million.

Among the categories of export pepper, ground black pepper is growing strongly this year. In September 2020, the export of ground black pepper reached 2.7 thousand tons, worth US$7.5 million, up 36% in volume and 36.2% in value compared to September 2019. Overall, in the first 9 months of 2020, the export of ground black pepper increased by 37.5% in volume and 26.6% in value over the same period in 2019, reaching 24.3 thousand tons, worth US$ 68.14 million. Exports of ground black pepper to most major markets including the United States, UK, Netherlands, Japan, Australia, Thailand, Sweden, China, and Korea increased.