Pepper prices decline sharply

Pepper prices decline sharply

Ngoc Hung

A farmer takes care of his pepper farm. Pepper prices plunged to around VND150,000 per kilogram on February 29, compared to nearly VND200,000 in September last year - PHOTO: NH

The director of a major pepper exporting firm said the price has dropped quickly after Vietnamese authorities announced that the pepper growing area has reached almost 100,000 hectares, two times higher than zoned and well above the acreage previously forecast by the Vietnam Pepper Association (VPA).

He noted when Vietnam only had 50,000 hectares of pepper, Vietnam’s pepper output accounted for 30% of global output and up to 50% of total pepper volume traded on global markets.

With 100,000 hectares of pepper and average yield of 2.6 tons per hectare, experts calculate that Vietnam can produce at least 200,000 tons. This piles pressure on prices on global markets.

Another reason, according to the director, is that Spain has recently warned that Vietnamese black pepper contains a higher-than-permitted residue of Carbendazim fungicide. Although this European country has taken measures to control it, instead of suspending its import, this is a reason for importers to force Vietnamese exporters to reduce prices.

Do Ha Nam, chairman of the Vietnam Pepper Association (VPA), told the Daily that local pepper growers usually store the commodity when prices fall to prevent further drops. Farmers and enterprises will sell it when it is profitable.

Nam said pepper growers have earned much in the past years thanks to high prices, so they are not under pressure to sell the product when the price falls.

Pepper prices started to increase strongly from the second half of 2010 to VND80,000 per kilogram in October of 2010 and VND200,000 in September last year. As a result, pepper export revenue shot up from US$419 million in 2010 to US$1.26 billion last year.

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