The pepper market is facing a volatile picture, where fierce competition between producing countries is strongly affecting prices. Vietnam, once known as the world's "pepper king", is facing a major challenge from Indonesia, a competitor that is increasingly asserting its position in the international market.
In the context of the global pepper supply remaining very large, especially from major consumer markets such as China, India and European countries, which direction will the pepper price go tomorrow, October 18, 2024?
Can pepper prices maintain their growth momentum or will they be affected by competitive pressure from Indonesia, which is taking advantage of the pepper harvest season to boost exports?
A deeper analysis of the pepper market shows that many factors affect prices:
Global demand for pepper remains very high, especially from markets such as China, India and European countries. This creates momentum for pepper prices to increase.
Vietnam's pepper supply is facing difficulties due to prolonged drought. The drought has severely affected the productivity and quality of pepper plants, leading to a significant reduction in supply. The 2025 harvest is expected to be delayed, mainly concentrated in February 2025 and extending to March and April in some regions. This suggests that domestic pepper supply will continue to be limited in the coming time.
Indonesia is asserting its position in the world pepper market by increasing production and exports. The country is taking advantage of the pepper harvest season to boost exports to major consumer markets, including China.
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| Pepper price forecast on October 18, 2024: Will pepper prices 'survive' competitive pressure? |
The strong growth of Indonesian pepper exports has created greater competitive pressure for other exporting countries, especially Vietnam.
According to data from the Chinese Customs, in August 2024, the country's pepper imports reached 890 tons, worth 5.8 million USD, down 54.7% in volume and 36.8% in value compared to the previous month, but up 23.7% in volume and 80.9% in value compared to the same period last year.
In the first 8 months of the year, China imported 7,484 tons of pepper, worth 36.1 million USD, up 21.9% in volume and 41% in value over the same period in 2023. This shows that the demand for pepper in the Chinese market is still very large.
However, in the first 8 months of this year, China's pepper import price averaged 4,825 USD/ton, up 15.7% over the same period last year. Of which, the average import price from Indonesia increased by 10.9% to 4,611 USD/ton; while the import price from Vietnam increased by 24.1% to 4,708 USD/ton.
The two main pepper supply markets for China in the first 8 months of the year were still Indonesia and Vietnam, accounting for a total of 90% of the imported pepper market share.
Indonesia has emerged as the largest pepper supplier to China with 4,399 tons, a sharp increase of 53.2% over the same period. This shows that Indonesia is increasingly asserting its position in the world pepper market, especially in the Chinese market.
The decline in pepper exports to China will have a significant impact on the Vietnamese pepper industry, especially in the Central Highlands provinces. Businesses need to seek new markets and diversify products to minimize risks. The strong growth in pepper exports will bring many benefits to the Indonesian pepper industry, while creating greater competitive pressure for other exporting countries.
Thus, it can be seen that prices from Indonesia are more competitive than Vietnam because this country is in the pepper harvest season, causing abundant supply. This could be one of the main reasons for the sharp increase in pepper exports from this country to China in recent times.
According to the latest data from the Vietnam Pepper and Spice Association (VPSA), Vietnam's pepper exports to China in the first 9 months of the year (including official and unofficial channels) reached 8,905 tons, down sharply by 84.1% over the same period last year.
Ptexim Company assessed that the pepper market continues to be sluggish due to low demand in most key markets such as the US, China, the European Union (EU), and the Middle East. Tensions in the Middle East are still ongoing, limiting import demand.
Based on the analysis factors, it can be predicted that pepper prices tomorrow, October 18, 2024, will continue to be under downward pressure due to fierce competition from Indonesia. However, global consumption demand is still very large, creating momentum for pepper prices to increase.
To maintain its position in the international market, the Vietnamese pepper industry needs to focus on: Ensuring the quality of Vietnamese pepper meets high standards to compete with products from Indonesia. Opening up new markets to minimize the risk of dependence on a single market. Developing processed pepper products, spice products, and high-end products to increase added value.
In short, competition from Indonesia is a big challenge for the Vietnamese pepper industry. To overcome this challenge, Vietnamese businesses and farmers need to make efforts to improve product quality, seek new markets and diversify products to maintain their position in the international market.
*Information for reference only.
Source: https://congthuong.vn/du-bao-gia-tieu-ngay-18102024-lieu-gia-tieu-co-vuot-song-truoc-ap-luc-canh-tranh-353117.html
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