Improve quality, target high-end market segment

The company has orders until the end of the second and third quarters.

As one of the leading agricultural product exporters in Vietnam, with main products being cinnamon, star anise, pepper, coconut rice, cashew nuts and coffee,... Ms. Le Thi Mai - General Director of Tuan Minh Trading and Production Company Limited - shared about positive signals from the export market in general and spice products in particular.

Các sản phẩm tiêu biểu của Tuấn Minh được trưng bày, tham gia nhiều hội chợ quốc tế.

Tuan Minh's typical products are displayed and participate in many international fairs.

According to Ms. Le Thi Mai, up to now, the company has signed orders with customers in the EU until September 2024. Currently, the company is focusing on preparing goods to be able to deliver orders in March with an export volume of 500 - 600 tons.

This year, pepper and coffee prices are forecast to be high. This brings both opportunities and challenges for agricultural export enterprises. Ms. Le Thi Mai said that with a wide and sustainable customer base from all continents around the world, in order to prepare a sufficient quantity and quality of goods for partners, the enterprise has developed a plan to collect raw materials in advance.

“For agricultural products, the purchase of agricultural products depends on the season, for example, the cinnamon crop will start purchasing from April to June, while the pepper crop will start from March and April. Before the season, the enterprise has prepared financial resources and focused on collecting in the raw material areas of Yen Bai and Lao Cai for cinnamon; Dak Nong and Dak Lak for pepper and coconut rice in Ben Tre” , Ms. Mai shared and said that in 2023, Tuan Minh's revenue reached 30 million USD, the market is favorable, the enterprise set a target of increasing export revenue by 20% in 2024, this number will increase to 50 million USD in 2025 and reach 100 million USD in 2030.

Of course, the market is not all rosy, businesses are also facing the problem of high transportation costs and high prices of purchased raw materials. “From the end of 2023 until now, shipping rates have increased dramatically. Even shipping rates to the US and EU markets have increased by 100%. For the Middle East market, businesses are affected by the Red Sea issue, shipping rates on some routes passing through the region have doubled,” said Ms. Mai.

With 6 factories, Prosi Thang Long Company currently exports products such as cinnamon, star anise, cashew nuts, and pepper to nearly 100 markets around the world. The company's products have now entered demanding markets such as the EU and the US. In 2023, exports will reach over 30,000 tons of agricultural products.

Ms. Nguyen Thi Thanh Huyen - Deputy Director of Prosi Thang Long Company - said that up to now, we have received a number of orders for the second quarter of 2024. Not worried about orders, but what this business is worried about is that the 'wave' of price increases in the pepper industry puts businesses at risk in meeting orders from partners. "There is a situation where businesses have difficulty buying goods, partly because pepper prices have increased sharply, so farmers have limited sales" , Ms. Huyen shared.

Similarly, Ms. Trinh Thanh Thao - Director of Viet Linh Trading Company Limited - also excitedly said that at the beginning of the year, the company had implemented 2 large orders with an output of 100 tons of pepper, onion, and cinnamon products exported to the Middle East market. The company has exploited the order for April 2024. However, Ms. Trinh Thanh Thao admitted that forecasting agricultural product prices is always very difficult to predict, because prices fluctuate continuously. This requires agility and accurate judgment of the company.

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Currently, pepper accounts for a large proportion in the world's spice basket and plays an important role in culinary culture. In particular, pepper products are being processed into pharmaceuticals, cosmetics and health care products. The pepper market is valued at 5.43 billion USD, with an average growth forecast of more than 20% in the period 2024 - 2032.

Pepper prices are expected to remain high.

The Vietnamese pepper industry accounts for 40% of the world's output and 60% of the world's market share. However, according to Mr. Le Hoang Tai - Deputy Director of the Trade Promotion Agency (Ministry of Industry and Trade), in the current global context, the spice and pepper industry is facing many challenges from market fluctuations, geopolitical instability, supply chain disruptions, and rising inflation. The US, EU, and Middle East markets are increasing their demand for sustainable products. This is a challenge but also an opportunity for Vietnamese pepper and spice exporting countries.

According to Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association, sustainability and comprehensiveness are the two pillars of the pepper industry in the coming period. In particular, the role of enterprises is very important in training and coaching farmers for sustainable production, training farmers not to use pesticides and chemicals in production.

"Sustainability and inclusiveness cannot be achieved overnight, but require long-term commitment, commitment to creating a sustainable future. Let's share experiences together to achieve sustainability and inclusiveness," Ms. Hoang Thi Lien emphasized.

Regarding this, from the business perspective, Ms. Le Thi Mai shared that while previously the business mainly focused on low-end and mid-range market segments such as India and the Middle East, in the past 5 years, the business has invested in factories that have achieved international standard certifications such as BRC, Halal, FDA, ISO, HACCP, Kosher, FSMA. With a closed production process from the stage of collecting and processing raw materials to the production process into high-quality products for export, ... the business targets high-quality export customers such as the EU and the US.

“Develop marketing plans, participate in trade fairs and exhibitions, and promote trade in domestic and foreign markets to reach high-end customers and grasp consumer trends and customer requirements,” Ms. Mai shared, adding that the company is also aiming to connect with people in raw material growing areas. to Develop organic products to meet the high-end market segment.

In addition to the efforts of enterprises, according to Ms. Le Thi Mai, most agricultural export enterprises are small and medium enterprises. Therefore, we hope to have the support of agencies from the central to local levels, especially access to loans with preferential interest rates to have prices and improve the competitiveness of products. At the same time, enterprises can increase production scale, diversify products, etc., thereby achieving growth targets as well as meeting orders that enterprises have signed.

In addition, businesses still lack market information, so it is recommended that the authorities regularly provide information to grasp the situation. From there, gradually affirming its position as the world's leading producer and exporter of pepper, currently ranked 3rd in production and 1st in cinnamon export; ranked 3rd in production and 2nd in star anise export.

According to the Ministry of Agriculture and Rural Development, in the first two months of 2024, pepper exports reached 35,000 tons with a value of 143 million USD, down 12.3% in volume but up 12.9% in value. Vietnam's largest pepper consumption market is the US with a proportion of 29%, followed by India with 8%, Germany with 6%...

In the first two months of 2024, the average export price of Vietnam's pepper is estimated at 4,041 USD/ton, up 28.7% over the same period in 2023. The increase in export prices of pepper also caused domestic pepper prices to continuously increase. In particular, pepper prices have continuously increased since after the Lunar New Year 2024. Domestically, there was a time when pepper prices reached 96,000 VND/kg.

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