Rapidly increasing to 190,000 VND/kg?

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

According to VSPA, the prolonged drought has caused Vietnam's pepper output this year to drop by 10% to about 170,000 tons compared to last year, the lowest level in the past 5 years. Meanwhile, the inventory from 2023 to 2024 is also the lowest in many years.

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

Besides supply and demand factors, the rapid price increase has encouraged speculative activities of agents, exporters and farmers in the domestic market due to the expected significant decrease in raw material supply.

A large-scale agricultural product purchasing agent in Buon Ma Thuot City said that he is actively looking for a source of pepper supply, but because the harvest has been over for a long time and prices are increasing "dizzily" every day, it is very difficult to find a source of goods. Farmers all expect prices to continue to increase, so they are still trying to keep their stocks in reserve to sell at the best price, only selling if there is a sudden need for money.

In addition, the pepper growing area in major growing areas in the Central Highlands has now been reduced compared to before due to farmers switching to other crops, causing pepper output to decrease year by year. These factors are making it difficult for agents and businesses to find sources of goods to deliver to partners.

According to Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association (VPSA): Although pepper prices are forecast to increase, pepper plants in the Central Highlands and Southeast provinces are under great competitive pressure from other crops, especially durian. In recent times, many pepper gardens have been cut down by farmers to replace them with this fruit tree. Global pepper output this year will be at its lowest level in the past 5 years. Vietnamese pepper prices are expected to be more positive in the coming time.

Forecasting the upcoming pepper price increase cycle, the General Secretary of the Chu Se Pepper Association said that in 2006, pepper prices were at their lowest, then nearly 10 years later, in 2015, pepper prices peaked at over VND250,000/kg. But in March 2020, pepper prices hit rock bottom, at VND34,000/kg.

In the domestic market on June 10, Dak Lak pepper price was purchased at 170,000 VND/kg, an increase of 2,000 compared to yesterday's price. Chu Se pepper price (Gia Lai) is currently at 168,000 VND/kg, an increase of 2,000 VND/kg compared to yesterday. Dak Nong pepper price today recorded a record price of 171,000 VND/kg, an increase of 4,000 VND/kg compared to yesterday.

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

Thus, domestic pepper prices today continued to increase sharply in most key localities compared to yesterday, increasing by 2,000 - 4,000 VND/kg. In all localities, pepper prices exceeded 168,000 VND/kg. The highest pepper price was recorded at 171,000 VND/kg.

Domestic pepper price on June 11 , 2024

Province, city	Unit	Trader purchase price	Increase/decrease compared to yesterday
Chu Se (Gia Lai)	VND/kg	168,000	+2,000
­­ Dak Lak	VND/kg	170,000	+2,000
Dak 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

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

Muntok white pepper price is 7,425 USD/ton (up 0.38%); Malaysian ASTA white pepper price remains at 7,300 USD/ton.

Vietnamese black pepper prices remain high, trading at 6,500 USD/ton for 500 g/l; 6,700 USD/ton for 550 g/l (up 11.94%); white pepper price at 9,500 USD/ton (up 15.79%).

PTEXIM Corp's latest weekly report stated that strong demand from traditional markets such as China, the Middle East and the US/EU last week reinforced the belief that black pepper prices will continue to increase in the coming time.

The rapid increase in pepper prices has made farmers very excited, along with other agricultural products such as coffee and durian also increasing in price, thereby improving people's lives.

According to PTEXIM, however, new pepper planting has not been widely recorded, because the cost of new pepper planting has become more expensive than before. Besides, other agricultural crops bring better profits than black pepper such as coffee, cocoa, durian.

Another reason for the recent increase in pepper prices, in addition to supply and demand, is that sea transport is becoming increasingly expensive.

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

* Information for reference only. Prices may vary by location.

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