New standards in EU, US could hurt Vietnamese pepper

New limits on fungicide residues in major markets could hurt the world’s leading pepper exporter.

Vietnamese pepper farmers could lose significant market share if new quality control measures in Europe and the United States take effect.

The European Union (EU) is currently considering lowering residual limits on Metalaxyl—a common fungicide.

The new measure would lower the limit to 0.05 parts per million (from 0.1 ppm) according to the Vietnam Pepper Association (VPA).

A recent report from the European Spice Association showed that in 2016, only 17 percent of nearly 800 Vietnamese pepper samples met the new standard.

The EU consumes around 40,000 tons of Vietnamese pepper per year, about 23 percent of the country’s annual export.

The overall picture may prove gloomier as the U.S. weighs new requirements on agricultural imports, including Vietnamese pepper, according to the VPA, which has warned farmers to shift focus from quantity to quality.

Vietnamese farmers often use excessive amounts of fertilizers and pesticides to boost productivity, weakening the natural resistance of pepper trees. As the trees grow more vulnerable to pests, farmers apply higher doses of chemicals.

“Only when farmers change their habits will the quality of Vietnamese pepper improve. Then, the industry will develop on a sustainable path,” the VPA said in a press release.

Last year Vietnam sold a record 177,000 tons of pepper abroad, netting $1.4 billion and representing an on-year jump of 34.3 percent in volume and 12.9 percent in value.

As global demand for pepper is expected to rise in 2017, the trade ministry has set a 13-percent growth target for the industry, which hopes to draw $1.6 million from foreign markets.