Winter Crop Year 2025-2026: Many Opportunities and Challenges (Part 2): Soaring Agricultural Prices and Pressure to Manage Supply Chains

In recent days, the prices of some agricultural products such as tomatoes, green vegetables, and especially chili peppers have skyrocketed, reaching a record high of approximately 130,000 VND/kg, ten times higher than the same period last year. This has created opportunities to increase farmers' incomes. However, for processing businesses and establishments that use a lot of chili peppers as a spice, this "sudden price increase" will create significant pressure on production and business.

Chili peppers are considered a staple crop during the winter season.

Because chili peppers are adaptable to various soil types, resistant to pests and diseases, and have low production costs, in recent years, people in Thanh Hoa province have expanded the area under cultivation and converted some less efficient crops to chili peppers, especially during the winter season.

According to statistics from the Department of Agriculture and Environment, farmers in the province plant 1,500-2,000 hectares of chili peppers in the winter season each year, yielding thousands of tons, making it one of the largest chili-growing areas in the North Central region.

For the 2025-2026 winter crop season alone, despite unfavorable weather conditions, the entire province planted approximately 1,000 hectares of chili peppers. Currently, the chili plants are entering the harvesting stage, with an estimated yield of 1 ton per sao (approximately 1000 square meters).

Thanks to their linkages with businesses and traders right from the start of the season, cooperatives sign contracts to guarantee sales, plan planting areas, provide technical guidance, and supervise the cultivation process. This linkage helps farmers reduce the worry of "bumper harvests leading to low prices" while also helping businesses secure a stable supply of raw materials.

However, with the current surge in chili prices on the market, the pressure is mounting on processing businesses.

Sorting chili peppers before processing at Hoang Giang Agricultural Products Processing Plant, Trung Chinh commune.

Mr. Hoang Ngoc Ha, Director of Hoang Giang Agricultural Products Processing Factory in Trung Chinh commune, said: "Along with some agricultural products such as pineapples, lychees, and sweet corn, we also produce canned chili peppers for export. Every year, we cooperate with people in some major chili-growing areas of the province to purchase about 100 tons of raw chili peppers for processing. However, this year the price of chili peppers has increased, making procurement difficult and increasing production costs. Therefore, we only purchase a small amount to maintain production and fulfill existing orders."

Reportedly, Hoang Giang Agricultural Products Processing Plant has 4 chili pickling tanks, each with a capacity of approximately 20 tons. The raw materials are sourced through partnerships with farmers in the Nong Cong and Yen Dinh areas. Currently, the plant's export orders are largely concentrated in the Chinese, South Korean, and Mongolian markets.

Chili peppers and tomatoes are the two main ingredients used in the production of Spico Co., Ltd.

As for Spico Co., Ltd. in Ham Rong ward – a major producer of chili sauce and tomato sauce in the province – although they have established partnerships with chili growing areas to secure a portion of their raw materials, the company is also struggling to maintain profitability, ensure supply, and retain customers in recent days as the price of raw chili has skyrocketed.

With a consumption volume of 3,000 to 5,000 products per month, Spico Co., Ltd. requires approximately 2 tons of chili peppers and 3 tons of tomatoes as raw materials. Therefore, in addition to its own raw materials, the company has to source up to 70% from production areas within the province, such as Hoang Hoa, Thieu Hoa, and Yen Dinh. When the prices of tomatoes and chili peppers increase, sourcing from farmers becomes difficult, and the cost of producing the final product skyrockets.

Mr. Le Minh Cuong, Director of Spico Co., Ltd., said: "Currently, the cost of chili and tomato raw materials is quite high, significantly increasing production costs. Our company is committed to using only high-quality raw materials for production and processing, so we cannot import low-quality, cheap materials from the market. Furthermore, we cannot immediately increase product prices, so for now, we are only maintaining production, potentially incurring short-term losses to reduce the pressure of price increases on customers."

Hien Nhuan Production and Trading Co., Ltd. is seeking alternative raw materials for high-cost agricultural products to reduce production costs and stabilize product prices.

The recent surge in prices of agricultural products, tomatoes, and peppers has brought joy to farmers and production cooperatives. However, many stages in the value chain and product consumption have been significantly affected, impacting consumers and housewives. The solutions proposed by various organizations and individuals are to reduce sourcing and production capacity to limit costs.

Ms. Tong Thi Hien, Director of Hien Nhuan Production and Trading Co., Ltd., said: "Currently, we are developing a processed food supply chain that uses a lot of agricultural products. When the prices of agricultural products, especially chili peppers and tomatoes, increase, it will incur many costs and drive up product prices. However, instead of increasing selling prices and affecting consumers, the company has researched and reduced the quantity and proportion of expensive and rare agricultural products while still ensuring the quality of food when it reaches customers.”

The profits from exporting chili peppers and tomatoes are currently very attractive to farmers, and in many localities, people are expanding their production area. However, the question arises: will excessive expansion lead to oversupply? Meanwhile, chili peppers and tomatoes are only consumed in certain markets, mainly China – a rather volatile market – and a few other countries in the Asian region.

For winter crops to truly develop sustainably, generate high income, and effectively develop established agricultural supply chains, attention must be paid to management, planting schedules, planning, and linking to find markets for the products. We must avoid situations where farmers continuously expand their planted area when prices are high, leading to surpluses, and then reduce acreage when prices fall. Only then will chili peppers and tomatoes in particular, and agricultural production in general, be sustainable and bring economic value to farmers not only this winter but also in subsequent seasons.

Le Hoa

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  Winter crop season 2025-2026: Many opportunities and challenges (Part 1): Winter crops...

  In late September and early October 2025, prolonged heavy rains accompanied by storm circulation caused widespread flooding, severely damaging many winter crops in Thanh Hoa province. Thanks to proactive measures, people gradually restored production. Notably, after the floods, the reduced supply pushed up the prices of some agricultural products such as chili peppers and tomatoes right from the beginning of the season, helping people compensate for losses and bringing great joy and motivation to stay committed to farming.

Source: https://baothanhhoa.vn/vu-dong-nam-2025-2026-nhieu-khoi-sac-va-thu-thach-bai-2-gia-nong-san-tang-chong-mat-va-suc-ep-quan-ly-cac-chuoi-cung-ung-271841.htm