Pepper market has too many unusual fluctuations

Mr. Hoang Phuoc Binh - Permanent Vice President of Chu Se Pepper Association (Gia Lai) had an interview with reporters of Industry and Trade Newspaper about this issue.

In the second week of August 2024, pepper prices witnessed a drop to 135,000 VND/kg, the lowest in the past 2 months. What is the reason, sir?

Unlike previous years, the pepper market this year has had many unusual fluctuations. However, in general, pepper has begun to enter a price increase cycle. This cycle is not 5-7 years but maybe 10 years. This is due to the market mechanism and supply and demand. However, it is very difficult to predict the exact price of pepper in the coming period.

Pepper prices witness a turbulent week

The large fluctuations in pepper prices have led to many risks. Recently, I attended the meeting to review the first 6 months of 2024 and forecast the situation for the last 6 months of the year of the Vietnam Pepper and Spice Association (VPSA). Here, VPSA also gave an assessment that some businesses sold in advance (ie short-selling), and when pepper prices increased, businesses had to "run out of stock".

From now until the time before the new crop (around January of the solar calendar), there will be a shortage of goods, but whether the shortage is large or small, whether businesses can endure to wait until the new crop or not, no one can judge. Because pepper has a characteristic that it can be stored from year to year.

How much pepper is left (including from speculation or businesses still in stock), at this time is very difficult to give an exact number, this is a business secret. We can only give an estimated number.

Regarding the issue of China reducing imports of Vietnamese pepper and increasing purchases of Indonesian pepper, what is the reason, sir?

Preliminary statistics from the Vietnam Pepper and Spices Association (VPSA) show that in July 2024, pepper exports to China reached only 606 tons, down 76.5% compared to June. Overall, in the first 7 months of the year, China ranked 4th among the Top 5 largest pepper purchasing markets of Vietnam, reaching 8,059 tons, down 84.6% over the same period.

Mr. Hoang Phuoc Binh - Permanent Vice President and General Secretary of Chu Se Pepper Association (Gia Lai)

Previously, according to data from China Customs, in June 2024, the amount of pepper imported into the Chinese market reached more than 2,000 tons, 2.5 times higher than in May and up 40% over the same period last year. Notably, Vietnam dropped to second place among the largest markets for pepper imported by China (after Indonesia) in the first half of this year with 1,515 tons, down 7.6% over the same period last year.

Regarding China's reduction in imports of Vietnamese pepper and increase in purchases of Indonesian pepper, we are also asking the Vietnam Pepper and Spice Association and specialized agencies of the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade to review and find out the cause.

In fact, the current price of Indonesian pepper is not lower than the price of Vietnamese pepper, and is even higher than the price of Vietnamese pepper. Thus, it is clear that this does not stem from price reasons.

The question is why did China increase its purchase of Indonesian pepper? What kind of pepper did it increase its purchase? Is it a familiar item to the market, customers, and tastes of the Chinese people?

Previously, China used to buy pepper using the soaking technology and they are still accepting this product. Meanwhile, many leading Vietnamese export enterprises are focusing on making white pepper - using steaming technology instead of soaking technology as before and boosting exports to the US and EU markets. Is this the reason?

Another issue that can also be mentioned is whether China is tightening the export of black pepper, which could be an obstacle preventing China from importing much pepper from Vietnam? We need to understand all these issues clearly.

What is your forecast for the upcoming pepper season?

Pepper harvest season in Vietnam lasts from January to the end of April in key growing areas. Some pepper growing areas in Quang Tri extend the harvest season until the end of June, this number is not many.

Regarding the assessment of the upcoming pepper crop, there is currently a lot of conflicting information. Some say it will decrease, others say it will increase, so the information is quite confusing. Some gardeners shared that their pepper gardens did not produce fruit this new pepper crop. However, some gardeners said that they are expected to have a bumper crop. This is due to weather factors.

Vietnam is located in a region with quite diverse weather sub-regions. Especially in the context that Vietnam is facing the upcoming La Nina phenomenon, heavy rain makes it difficult for pepper to set fruit.

However, to get the exact figure, it is necessary to go to the actual area of ​​each region, each commune of the key pepper growing area. Many opinions say that it is only at the end of the year, that is, around November and December, that we can give a fairly accurate forecast of output.

However, I think this is not too important. Because if the next pepper crop is a little better than the last one, it will not be able to make up for the pepper acreage that has been lost in the past and is still being lost. Therefore, the price increase cycle is expected to continue.

Thank you!

After a slight increase at the end of last week, pepper prices witnessed a sharp decline at the beginning of this week. Specifically, pepper prices today (August 13) decreased by 4,000 - 5,000 VND/kg in some localities in key growing areas, recording the highest price of 138,000 VND, fluctuating in the price range of 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