Rapidly increasing to 190,000 VND/kg?

Pepper prices on June 12, 2024, are projected to continue rising to a record high of 190,000 VND/kg. The Import-Export Department ( Ministry of Industry and Trade ) forecasts that pepper prices will continue to increase in the coming period, but the rate of increase will slow down. Currently, there is a shortage of pepper supply while demand is recovering strongly from major markets such as Europe, the US, and China. This year's pepper production in Vietnam and many other major producing countries is projected to decline due to the impact of the El Nino phenomenon and a decrease in cultivated area.

According to VSPA, the prolonged drought has led to a 10% decrease in Vietnam's pepper production this year, down to approximately 170,000 tons compared to last year, the lowest level in the last five years. Meanwhile, inventory carried over from 2023 to 2024 is also at its lowest level in many years.

Meanwhile, in Brazil, some forecasts suggest that the country's production could fall by 18-23%, to 85,000-90,000 tons compared to the 110,000 tons of 2023.

Besides supply and demand factors, the rapid price increase has encouraged speculative activity among dealers, exporters, and farmers in the domestic market due to the anticipated significant decrease in raw material supply.

A large-scale agricultural product purchasing agent in Buon Ma Thuot City said that they are actively searching for pepper supplies, but because the harvest has long passed and prices are skyrocketing daily, it is very difficult to find sources of supply. Farmers are hoping that prices will continue to rise, so they are trying to hold onto their stock to sell at the best possible price, only selling if they have an urgent need for money.

Furthermore, the area planted with pepper in major growing regions of the Central Highlands has shrunk compared to before due to farmers switching to other crops, causing pepper production to gradually decrease over the years. These factors are making it very difficult for dealers and businesses to find supplies to distribute to their partners.

According to Ms. Hoang Thi Lien, President of the Vietnam Pepper and Spice Association (VPSA): Although pepper prices are predicted to rise, pepper plants in the Central Highlands and Southeast provinces are facing significant competition from other crops, especially durian. In recent times, many pepper plantations have been cut down by farmers to replace them with durian trees. Global pepper production this year will be the lowest in the last five years. Vietnamese pepper prices are expected to improve in the near future.

Forecasting the future price increase cycle of pepper, the General Secretary of the Chu Se Pepper Association stated that in 2006, pepper prices were at their lowest, then nearly 10 years later, in 2015, prices peaked at over 250,000 VND/kg. However, in March 2020, pepper prices hit rock bottom at 34,000 VND/kg.

On June 10th, in the domestic market, the price of pepper from Dak Lak was purchased at 170,000 VND/kg, an increase of 2,000 VND compared to yesterday's price. The price of pepper from Chu Se (Gia Lai) is currently at 168,000 VND/kg, also up 2,000 VND/kg compared to yesterday. Today's price of pepper from Dak Nong reached a record high of 171,000 VND/kg, an increase of 4,000 VND/kg compared to yesterday.

In the Southeast region, pepper prices increased by 3,000 - 4,000 VND today. Specifically, in Ba Ria - Vung Tau, the price reached 169,000 VND/kg, an increase of 4,000 VND/kg; in Binh Phuoc , the price also reached 169,000 VND/kg, an increase of 3,000 VND/kg.

Thus, domestic pepper prices today continued their strong upward trend in most key producing regions compared to yesterday, with increases of 2,000 – 4,000 VND/kg. In all localities, pepper prices exceeded 168,000 VND/kg. The highest price recorded was 171,000 VND/kg.

Domestic pepper prices on June 11 , 2024

Province, city	Unit	The price offered by traders.	Increase/decrease compared to yesterday
Chu Se (Gia Lai)	VND/kg	168,000	+2,000
­­ Dak Lak	VND/kg	170,000	+2,000
Boeing Nong	VND/kg	171,000	+4,000
Binh Phuoc	VND/kg	169,000	+3,000
Ba Ria - Vung Tau	VND/kg	169,000	+4,000

On the world market, at the close of the most recent trading session, the International Pepper Community (IPC) listed the price of Lampung black pepper (Indonesia) at US$6,451/ton; the price of Brazilian ASTA 570 black pepper at US$8,500/ton (up 13.23%); and the price of Kuching black pepper (Malaysia) ASTA remained at US$4,900/ton.

Muntok white pepper prices are at US$7,425/ton (up 0.38%); Malaysian ASTA white pepper prices remain at US$7,300/ton.

Vietnamese black pepper prices remained consistently high, trading at US$6,500/ton for the 500 g/l variety; US$6,700/ton for the 550 g/l variety (up 11.94%); and US$9,500/ton for white pepper (up 15.79%).

PTEXIM Corp's latest weekly report indicates that strong demand from traditional markets such as China, the Middle East, and the US/EU this past week has reinforced the belief that black pepper prices will continue to rise in the near future.

The rapid increase in pepper prices has brought great joy to farmers, and along with it, the prices of other agricultural products such as coffee and durian have also risen, thereby improving people's lives.

According to PTEXIM, however, new pepper cultivation has not yet been widely adopted, due to the increased cost of planting. In addition, other agricultural crops such as coffee, cocoa, and durian offer better returns than black pepper.

Another reason for the recent surge in pepper prices, besides supply and demand factors, is the increasingly expensive cost of sea transport.

Last week, a number of major shipping lines based in Taiwan (China), such as Evergreen, Yang Ming, and Wan Hai, predicted that congestion at Asian ports would not ease in the short term, and therefore, container shipping rates would remain high until the third quarter of 2024.

*This information is for reference only. Prices may vary depending on the location.

Source: https://congthuong.vn/du-bao-gia-tieu-ngay-1262024-tang-nhu-vu-bao-cham-moc-190000-dongkg-325563.html