Mr. Hoang Phuoc Binh, Permanent Vice Chairman of the Chu Se Pepper Association ( Gia Lai ), had an exchange with a reporter from the Industry and Trade Newspaper regarding this issue.
In the second week of August 2024, pepper prices saw a drop to 135,000 VND/kg, the lowest in the past two months. What were the reasons for this, sir?
Unlike previous years, this year's pepper market has experienced unusually volatile fluctuations. However, overall, pepper prices are beginning to enter an upward cycle. This cycle may not last 5-7 years, but possibly 10 years. This is due to market mechanisms and supply and demand. Nevertheless, making accurate predictions about pepper prices in the coming period is very difficult.
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| Pepper prices experienced a turbulent week. |
The extreme volatility in pepper prices leads to many risks. Recently, I attended the Vietnam Pepper and Spice Association (VPSA) meeting summarizing the first six months of 2024 and forecasting the situation for the last six months. At this meeting, the VPSA also stated that some businesses were selling in advance (i.e., short selling), and when pepper prices rose, they had to abandon their orders.
From now until the start of the new season (around January), a shortage of goods is certain, but whether the shortage will be severe or whether businesses will be able to endure it until the new season is something no one can assess. This is because pepper has the characteristic of being able to be stored year after year.
It is very difficult to give an exact figure at this time regarding the remaining amount of pepper (including stockpiled by speculators and businesses), as this is a trade secret. We can only provide an estimate.
Regarding the issue of China reducing its imports of Vietnamese pepper and increasing its purchases of Indonesian pepper, what are the reasons for this, sir?
According to preliminary statistics from the Vietnam Pepper and Spice Association (VPSA), in July 2024, pepper exports to China reached only 606 tons, a decrease of 76.5% compared to June. Overall, in the first seven months of the year, China ranked fourth among the top five largest pepper purchasing markets for Vietnam, reaching 8,059 tons, a decrease of 84.6% compared to the same period last year.
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| Mr. Hoang Phuoc Binh - Standing Vice Chairman and General Secretary of the Chu Se Pepper Association (Gia Lai) |
Previously, according to data from Chinese Customs, in June 2024, the amount of pepper imported into the Chinese market reached over 2,000 tons, 2.5 times more than in May and a 40% increase compared to the same period last year. Notably, Vietnam dropped to second place among the largest markets for pepper imports by China (after Indonesia) in the first half of this year with 1,515 tons, a decrease of 7.6% compared to the same period last year.
Regarding China's reduction in imports of Vietnamese pepper and increase in purchases of Indonesian pepper, we are also requesting the Vietnam Pepper and Spice Association and relevant agencies of the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade to review and investigate the reasons.
In reality, the price of Indonesian pepper is currently not lower than that of Vietnamese pepper, and is even higher in some cases. Therefore, this difference is clearly not due to price issues.
The question is, why is China increasing its purchases of Indonesian pepper? What type is it buying more of? Is it a familiar product to the Chinese market, trading partners, and consumer preferences?
Previously, China frequently purchased black pepper processed using the soaking method, and they still accept this method. Meanwhile, many leading Vietnamese export businesses are focusing on producing white pepper (hulled pepper) – using steaming technology instead of the previous soaking method – and boosting exports to the US and EU markets. Could this be the reason?
Another issue that could be raised is whether China is tightening restrictions on informal pepper exports, which could be a factor preventing China from importing large quantities of pepper from Vietnam. We need to investigate all these issues thoroughly.
What are your predictions for the upcoming pepper harvest season?
The pepper harvesting season in Vietnam lasts from January to the end of April in the major growing regions. Some pepper-growing areas in Quang Tri province extend the harvest season until the end of June, but this is not a large number.
Regarding predictions for the upcoming pepper harvest, there is currently conflicting information. Some say prices will decrease, others say they will increase, leading to considerable confusion. Some farmers share that their pepper plants are not bearing fruit this season. However, others say they expect a bumper crop, attributing this to weather conditions.
Vietnam is located in a region with a fairly diverse weather system. Especially in the context of the upcoming La Nina phenomenon, heavy rainfall is making it difficult for pepper plants to bear fruit.
However, to obtain accurate figures, it is necessary to conduct on-site visits to each region and commune within the key pepper-growing areas. Many believe that only at the end of the year, around November or December, can a fairly accurate forecast of production be made.
However, I believe this is not too important. Because even if the next pepper harvest is slightly better than the last one, it cannot compensate for the pepper growing area that has been lost recently and is still being lost. Therefore, the price increase cycle is expected to continue.
Thank you, sir!
| After a slight increase at the end of last week, pepper prices have seen a significant drop at the beginning of this week. Specifically, today's pepper prices (August 13th) decreased by 4,000 - 5,000 VND/kg in some key growing areas, with the highest price recorded at 138,000 VND, fluctuating between 137,000 - 138,000 VND/kg. The market is considered to be experiencing many unusual fluctuations. |
Source: https://congthuong.vn/thi-truong-ho-tieu-co-qua-nhieu-bien-dong-bat-thuong-338648.html
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