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Pepper prices not to be sneezed at but Vietnamese farmers run out
Word pepper prices are proving bitter sweet for suppliers – they’ve increased by $1,000 per tonne in six months – but Vietnamese farmers have none left for export.
According to the Vietnam Pepper Association (VPA), Vietnam had exported 104,786 million tonnes of pepper by the end of September 2009. It previously estimated that total pepper output would be 115,000 tonnes this year. However, supplies have run short.
Meanwhile, pepper price continues to increase. Black pepper is trading at $2,723 per tonne and white pepper at $3,946 – representing a $1,000 per tonne increase. Vietnam has lost $100 million as a result of exporting pepper too early at a lower price.
Vietnam’s pepper farmers have often been left wishing they had held on to their produce. In 2007, the gap between the highest and lowest price levels was $1,909 per tonne, while the figure was $2,070 per tonne in 2006.
Though Vietnam’s pepper is considered as very high quality - export prices remain lower by $300-500 per tonne than the world price.
Chief Secretariat of VPA Tran Duc Tung explained that differing world harvest times means Vietnam harvests earlier than the rest meaning there is a market for the goods. Later, as the world harvests – Vietnam has already run out.
This should mean that Vietnam was temporarily the world’s only pepper supplier which should have enabled them to set the price and volume of exports.
However, Tung said, Vietnamese enterprises could not cooperate with each other to obtain high export prices and, instead, rushed to export products.
VPA warned member companies in June 2009 that the pepper output in 2009 would not be profuse and that the pepper volume for export was not large. However, despite the warning, companies still rushed to export until the supply was exhausted.
Meanwhile, pepper export companies have blamed bad forecasting by the Ministry of Industry and Trade.
vietnamnet, tt
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