Should farmers sell early or borrow capital to store pepper?

Domestic pepper prices today

Today, December 7, 2024, domestic pepper prices continue to rise compared to yesterday, December 6, 2024; averaging 144,600 VND/kg, with significant increases in many localities.

Accordingly, today, December 7, 2024, pepper prices in Ba Ria - Vung Tau, Dak Lak, and Binh Phuoc all increased by 1,000 VND/kg; pepper prices in Dak Nong increased by 1,200 VND/kg, while pepper prices in Gia Lai saw the highest increase of 2,000 VND/kg.

Pepper prices today, December 7, 2024, remain high compared to yesterday, December 6, 2024. Photo: Le Son

Specifically, the price of pepper in Binh Phuoc and Ba Ria - Vung Tau is 144,000 VND/kg; the price of pepper in Dak Lak and Gia Lai is 145,000 VND/kg; while the price of pepper in Dak Nong is 145,200 VND/kg. The average price of pepper today, December 7, 2024, is 144,600 VND/kg, an increase of 1,200 VND/kg compared to yesterday, December 6, 2024.

Pepper prices have now passed their downward cycle and are beginning an upward cycle due to reduced supply. However, since buying pressure is not yet high at the beginning of the season, farmers should not be too hasty in selling their pepper early, and especially should not borrow capital to store pepper in order to avoid risks from market fluctuations.

Current pepper prices are fluctuating around 144,000 VND/kg, creating optimism for pepper growers after a period of stagnation. According to experts, the scarcity of supply due to inventory levels being at their lowest in 6-8 years has been a major driving force behind the price increase. Furthermore, strong export demand from major markets such as the US and EU continues to provide positive support for the market.

Updated pepper prices today, December 7, 2024

Today's world pepper prices

According to the International Pepper Association (IPC), the world pepper price update at the end of the most recent trading session showed that the market remained largely stable compared to the previous update, with only slight fluctuations in the Indonesian market.

Specifically, IPC listed the price of Indonesian Lampung black pepper at US$6,703/ton, up 0.28%; and Muntok white pepper at US$9,147/ton, a slight increase of 0.27%.

Brazilian ASTA 570 black pepper prices rose slightly by 0.8%, to $6,275/ton; Malaysian ASTA black pepper prices were at $8,200/ton, while Malaysian ASTA white pepper prices reached $10,400/ton.

Specifically, the price of Vietnamese black pepper remained stable at US$6,200/ton for the 500 g/l grade, and US$6,500/ton for the 550 g/l grade; the price of white pepper remained unchanged at US$9,300/ton.

Vietnamese farmers need to carefully consider whether to sell their pepper early or store it. Photo: Le Son

According to estimates from the Import-Export Department (Ministry of Industry and Trade), pepper exports in the first 11 months of 2024 reached 234.7 thousand tons and earned US$1.22 billion, a decrease of 4.4% in volume but an increase of 46.5% in value compared to the same period in 2023. The average export price of pepper was estimated at US$5,198/ton, an increase of 53.3% compared to the same period in 2023. This result makes pepper the agricultural product with the strongest export growth in the first 11 months of the year.

In November 2024 alone, the average export price of pepper reached US$6,856 per ton, a further increase of 4.7% compared to the previous month and a 78.7% increase compared to the same period in 2023. This is also the highest price achieved in many years.

Pepper prices have doubled compared to the previous period, creating a strong incentive for farmers to invest heavily in pepper cultivation. However, this crop also faces many challenges, including climate change, increasingly complex pests and diseases, competition with other crops, and rising production costs.

In addition, exporters are also facing increasing logistics costs, especially shipping and storage fees. This not only increases financial pressure but also drives up product prices, reducing competitiveness in the global market.

With the goal of exporting an additional 50,000 tons of pepper in the last two months of 2024, Vietnam's pepper industry is expected to achieve a turnover of 300 million USD, making a significant contribution to the total export revenue for the year. However, the 2025 harvest is predicted to face major difficulties due to climate change, potentially extending the harvesting period by 1.5-2 months, increasing supply pressure amidst continued high demand.

Experts advise farmers not to rush into selling or borrowing capital to store pepper, to avoid risks from price fluctuations. Instead, they should balance their finances and closely monitor market developments to choose the appropriate time to sell and optimize profits.

Looking ahead to 2025, the pepper and spice industry will focus on supporting farmers, cooperatives, and businesses in meeting international standards for food quality and safety. This is part of a long-term strategy to enhance product value, expand markets, and improve the position of Vietnamese pepper in the global market.