PEPPER EXPORT: DOWNTREND IN MOST MARKETS, NEW OPPORTUNITY IN EUROPE, WHAT SHOULD WE DO?

Import and Export Department (Ministry of International Trade and Industry) reviews: Pepper prices fall due to increasing global supply. However, in Vietnam the quality of pepper is partly affected by excessive use of chemicals and pesticides, so the price is lower than that of some other countries.

The Import-Export Department further analyzed: 5 years ago, Vietnam pepper was the world leader in productivity and output. In the past 2 years, many countries such as Brazil, India, and Indonesia have become competitors to Vietnam in terms of output and quality. In particular, Brazilian pepper is of better quality with 80% of the world market for organic standards.

In addition, Vietnam has about 100,000 hectares of pepper for harvest with an average yield of 24.7 quintals / ha, equivalent to an output of about 247,000 tons. Remarkably, while the price of pepper is still very low, the cost of producing pepper tends to increase. Vietnam’s pepper production cost in 2018 increased by at least 10% compared to 2017. While the selling price of pepper decreased by over 30%, causing great difficulties for pepper farmers.

Great opportunity from EVFTA!

Agro-Processing and Market Development Department analyzed: in the first 8 months of this year, while exports to most markets declined in value due to the impact of the downward trend in the global market, export of pepper to Germany market increased sharply in both volume and value. Specifically, in the first 7 months, exports to Germany reached 8,000 tons, equivalent to US $ 23.4 million, increase 53.3% in volume and 14.4% in value over the same period in 2018. Germany increased importing pepper to serve the growing pepper-processing industry in this country.

(Minister of International Trade and Industry Tran Tuan Anh and Minister of the Business Environment, Trade and Enterprise of Romania, Representative of EU Council, Stefan-Radu Oprea and Ms. Cecilia Malmstrom, EU Trade Commissioner, signed the Free Trade Agreement by Vietnam – EU)

What actions should we take?

From the story of prosperous pepper exports in Germany, the Department of Processing and Market Development of agricultural products said: in the context of Vietnam’s pepper exports are facing many difficulties and competitively great pressure, the successful signing of the Vietnam-EU Free Trade Agreement (EVFTA) will be a good opportunity for Vietnam’s pepper industry to promote pepper exports, especially processed pepper to the German market as well as other markets in the EU.

Pointing out specific things to do, the representative of the Institute of Policy and Strategy for Agriculture and Rural Development emphasized: The State needs to build and develop production areas, follow good agricultural practices and follow international standards; strengthen control, minimize the use of synthetic chemical pesticides and work out solutions to support production households to develop organic pepper plantations; promoting the construction of information systems, forecasts and market development, especially foreign markets, to take advantage of opportunities to enter and expand markets; promoting activities of promoting pepper trade to potential markets like Mexico, maintaining and developing the position of Vietnam pepper in EU markets.

Source: cafef.vn