Pepper exports face difficulties

VCN - Pepper exports since the beginning of the year have recorded a sharp increase compared to the same period last year. However, it is forecast that pepper exports in the near future will face difficulties as China continues the "Zero Covid" policy, and sea freight costs continue to stay at a high level.
Pepper exports recover but price unstable Pepper exports recover but price unstable
What are the corporate income tax incentives for pepper growing activities? What are the corporate income tax incentives for pepper growing activities?
Pepper exports continue to be quiet in 2021 Pepper exports continue to be quiet in 2021
Vietnam's pepper production is expected to continue to face a disadvantage due to the impact of climate change along with objective reasons such as rising fertilizer, drug and labor prices. Photo: ST
Vietnam's pepper production is expected to continue to face a disadvantage due to the impact of climate change along with objective reasons such as rising fertilizer, drug and labor prices. Photo: ST

Prices increased by more than 53%

According to statistics from the General Department of Customs, in the first 4 months of 2022, Vietnam's pepper exports reached 77.81 thousand tons, worth USD 362.73 million, down 16.6% in volume but up 28% in value, over the same period in 2021. The average export price reached USD 4,662 /ton, up 53.4% over the same period in 2021.

Information from the Vietnam Pepper Association shows that from the end of the fourth quarter of 2021, pepper prices continuously fluctuated between VND 80,000/kg and lasted until the 2022 Lunar New Year (February 7, 2022) before increasing to 86,500 VND/kg, the highest level since early 2022 in mid-February (February 17, 2022). After that, the price dropped back to an average of 1,000-2,000 VND per week. Prices decreased in the first quarter of 2022 due to coincided with the peak harvest of Vietnam and some other producing countries, the supply is quite abundant. Another reason for the price drop is that exports to China fell by 81% due to the border closure.

By early May 2022, the price of black and white pepper in the domestic market recovered thanks to China's opening to customs clearance. However, the recovery did not last long because speculators continuously sold out, while the demand of the foreign market at this time was not high. It is still the time of delivery and receipt of goods signed last year, so foreign customers have not signed a new contract.

For example, on May 18, 2022, the price of black pepper in the domestic market decreased from VND 2,500 to VND 3,000/kg compared to April 28, 2022, to VND 73,000– VND 76,500 /kg. The price of white pepper is at VND 114,000/kg, down VND 3,000/kg compared to the end of April 2022, but still higher than the VND 100,000/kg in the same period in 2021.

“Increases again of pepper price or not depends on the purchasing demand of the Chinese market," said a representative of the Vietnam Pepper Association.

Although the value and export price of pepper increased sharply in the first four months of the year, the Vietnam Pepper Association acknowledged that fertilizer prices have nearly doubled over the past year, along with labor and costs. Businesses are equally affected when logistics prices continue to stand at high levels for many months. In addition, the application of the port fee collection of Ho Chi Minh City from April 1, 2022, further created the difficulties for enterprises.

Need to be careful in signing a contract

Vietnam's pepper production is expected to continue to face a disadvantage due to the impact of climate change along with objective reasons such as fever in land prices, fertilizer prices, and drug and labor costs. Meanwhile, the second largest pepper supplier in the world, Brazil, is still maintaining a good growth rate in both quantity and export value.

China's steadfastness in implementing the "Zero Covid" policy not only causes the domestic supply chain to break but also affects the price of Vietnamese pepper in the near future when exporting pepper to China. National forecasts continue to decline; at the same time, some pepper shipments that are stuck at the border gate may be sold back to Vietnam to cut losses, putting pressure on domestic pepper prices. In addition, shipping congestion may become worse after China's blockade and restrictions are eased because there will be an explosion in the volume of goods transported, thereby creating pressure for spot shipment cost.

“The pressure of petrol prices makes sea freight costs increased at a high level, causing many import-export enterprises to face difficulties, not to mention the situation of port jams and lack of containers still continuing. According to the latest announcement of shipping line ONE, from March 2022, the freight rate to Europe (about USD 7,300 per 20-foot container) will increase by USD 800 - USD 1,000. It is forecasted that from now until the end of the year, gasoline prices will still increase when the war between Russia and Ukraine is still tense. Therefore, businesses need to be careful in negotiating and signing contracts to avoid the risk of sudden increase in freight rates," said the representative of the Vietnam Pepper Association.

From a business perspective, sharing more deeply about the difficulties pepper enterprises are facing, Mr. Nguyen Nho Ly, Director of An Phong Dak Nong Co., Ltd and Chairman of Dak Song Pepper Association said that enterprises have weak potential and output difficulties. Enterprises find it difficult to access state support mechanisms and policies. Specifically, the project "Pepper is not just a seasoning" of An Phong Dak Nong Co., Ltd. is currently suspended due to difficulties in capital policies and mechanisms.

Talking about the plan to expand production according to American organic standards at 2-9 Dak Lak Import-Export One Member Company Limited (Simexco Dak Lak), Mr. Nguyen Tien Dung, Simexco Dak Lak's Sustainable Development Director, said that the current difficulty is that the area is fragmented and difficult to focus on assessment. The high increase price of the land makes farmers unable to maintain production and lack commitment in sustainable production. Meanwhile, the problem of residues for banned substances is still detected; toxic residues in the soil are still there.

Recognizing that state management agencies have not closely followed actual production; farmers cultivate spontaneously, chasing quantity; seed research is limited, Mr. Nho Ly said that there should be stronger support from the state in research on varieties. At the same time, mechanisms and policies for enterprises need to be loosened so that enterprises can access them.

Pepper exports enjoy bounce back Pepper exports enjoy bounce back

Despite pepper exports showing recent signs of recovery, experts have advised local pepper businesses to be proactive ...

"Enterprises also need support to strengthen linkages in the production of clean ingredients, improve deep processing, build brands, and connect businesses to consume output products," said Mr. Ly.

By Thanh Nguyen/Bui Diep

Related News

Director of Dong Nai Customs engages monthly with enterprises

Director of Dong Nai Customs engages monthly with enterprises

VCN - On November 1, Dong Nai Customs held an online Customs-Business Dialogue Conference attended by representatives from the Taiwanese (China), Korean, Japanese, and European business associations in Vietnam, alongside 83 import-export enterprises operating in Dong Nai province.
The Government adjust import and export tariff rate on certain goods

The Government adjust import and export tariff rate on certain goods

VCN - On November 1, 2024, the government issued Decree 144/2024/ND-CP, amending and supplementing certain provisions of Decree 26/2023/ND-CP on the export tariff schedule, the preferential import tariff schedule, tariff nomenclature, and the fixed duties, mixed duties, and out-of-quota import duties.
EU partners no longer

EU partners no longer 'lenient', Vietnam must adapt through ESG policies

VCN - Legal and economic experts are calling for Vietnam to revamp its policies to align with stringent sustainable development requirements set by European Union (EU) partners.
Quang Ninh Customs seeks solutions to promote import and export

Quang Ninh Customs seeks solutions to promote import and export

VCN - Quang Ninh Customs Department has made efforts to synchronously deploy solutions to accompany, support and resolve difficulties for businesses, contributing to improving import and export activities through the area.

Latest News

Changes in Canada

Changes in Canada's trade defense laws

VCN - Canada - a major trading partner of Vietnam - is making many changes in its trade defense investigation regulations, which has a significant impact on Vietnam's export activities.
Import and export are expected to reach 800 billion USD

Import and export are expected to reach 800 billion USD

VCN - Although the import and export turnover of goods slowed down in September 2024, in general, import and export activities, especially exports, still grew positively in the first 9 months of 2024. It is expected that import and export of goods in 2024 will reach a record of 800 billion USD.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Rice exports likely to set new record in 2024

Rice exports likely to set new record in 2024

Vietnam sold 800,000 tonnes of rice overseas for 505 million USD in October, bringing the country's total export volume and value in the first ten months to nearly 7.8 million tonnes and 4.86 billion USD, up 10.2% and 23.4% year-on-year, respectively.

More News

Vietnamese goods conquer halal market through trust and quality

Vietnamese goods conquer halal market through trust and quality

VCN - According to the Ministry of Agriculture and Rural Development, Vietnam's capacity to export over 50 billion USD worth of agricultural products annually, coupled with established supply chains, provides a significant advantage for Vietnamese agricultural and aquatic products to penetrate the Halal market.
Exporters urged to have strategies to take advantage of UKVFTA for expansion

Exporters urged to have strategies to take advantage of UKVFTA for expansion

The UK is concerned by sustainable development, labour issues, environmental protection and social responsibility. Therefore, when exporting to the UK, enterprises should not just be concerned about being competitive in terms of price and quality.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Vietnam and UAE trade sees billion-dollar growth

Vietnam and UAE trade sees billion-dollar growth

VCN - According to General Department of Vietnam Customs by the end of September 2024, bilateral trade between Vietnam and the United Arab Emirates (UAE) reached nearly US$5 billion, an increase of more than US$1.4 billion over the same period last year.
Sharing responsibility for ensuring security and safety of the supply chain

Sharing responsibility for ensuring security and safety of the supply chain

VCN – Post - clearance audit is carried out in a planned, focused and key manner, avoiding widespread and ineffective inspections, thereby creating convenience for the business community and improving the effectiveness of state management of customs.
Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - Tensions between Israel and Iran escalate, tuna businesses are worried, they may have to stop export orders to the Israeli market in the last months of the year.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.
Read More

Your care

Latest Most read
EU partners no longer

EU partners no longer 'lenient', Vietnam must adapt through ESG policies

Legal and economic experts are calling for Vietnam to revamp its policies to align with stringent sustainable development requirements set by European Union (EU) partners.
Changes in Canada

Changes in Canada's trade defense laws

VCN - According to the Vietnam Trade Office in Canada, as of September 2024, Canada has initiated nineteen trade defense investigations on Vietnamese export goods, including twelfth anti-dumping (AD) cases, five anti-subsidy cases and two defense cases.
Import and export are expected to reach 800 billion USD

Import and export are expected to reach 800 billion USD

VCN - At the regular Government meeting in September 2024, Minister of Industry and Trade Nguyen Hong Dien assessed: import and export continued to be a bright spot, recording a positive recovery compared to the same period last year.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Rice exports likely to set new record in 2024

Rice exports likely to set new record in 2024

Vietnam sold 800,000 tonnes of rice overseas for 505 million USD in October, bringing the country's total export volume and value in the first ten months to nearly 7.8 million tonnes and 4.86 billion USD, up 10.2% and 23.4% year-on-year, respectively.
Mobile Version