Pepper exports forecasted to reach 1 billion USD

Pepper exports this year rose sharply and are forecasted to continue in the remaining months, 2021 exports turnover can reach 1 billion USD.

Binh Phuoc farmers are excited because pepper price is high and consumption is good this year. Photo: Thanh Son.

Pepper used to be a billion-dollar export item. Specifically, from 2014 to 2017, the export value of pepper was constantly over 1 billion USD, of which, pepper exports in 2016 reached the highest value ever of 1.429 billion USD.

From 2018 to 2020, due to a sharp decrease in pepper prices in the world market because supply outstrips demand, pepper exports lost the 1 billion USD mark, and in some years, it has even dropped far from this milestone (pepper exports in 2020 reached just over 660 million USD).

This year, export value of pepper has grown strongly again. Information from the General Department of Customs shows that, in the first 9 months, pepper exports reached 719 million USD, up by 47% over the same period last year. According to information from the Vietnam Pepper Association (VPA), it is estimated that by the end of October, pepper exports reached 230,000 tons, worth about 800 million USD.

Export value of pepper increased by nearly 50% in 9 months mainly due to the high price in the world market, impacting the export price of Vietnamese pepper greatly. In the first 8 months of 2021, the average export price of Vietnamese pepper reached 3,326 USD/ton, up by 51.3% compared to the first 8 months of 2020.

Export price of pepper continues to increase in the remaining months of the year, a great opportunity for the pepper industry to rise sharply in export value, when import demand is increasing in many markets, especially the Chinese market

According to the Import-Export Department (Ministry of Industry and Trade), in the first few months of 2021, pepper imports of most countries with large market capacity increased over the same period in 2020, except for China. Information from the General Administration of Customs of China shows that in the first 9 months of this year, the amount of pepper imported into the country only reached 41,000 tons, down by 7.2% over the same period last year.

Therefore, the Import-Export Department said that China's pepper import demand is forecasted to increase sharply at the end of the year. This will have a positive impact on the export price of Vietnamese pepper, in the context that domestic supply is almost exhausted. It is speculated that pepper stockpiled from previous years will be sold.

It is worth noting that although there was a significant decrease in the amount of pepper imported in the first 9 months of this year although the amount of pepper that China bought from Vietnam increased strongly. Specifically, China's pepper imports from Vietnam increased by 10.9%, reaching 12.52 million USD. Vietnamese pepper market share in China's total import value increased from 25.66% in the first 9 months of 2020 to 30.54% in the first 9 months of 2021.

Vietnamese pepper is increasingly favored by the Chinese market. Therefore, if the import of pepper is promoted in the remaining months of the year, Chinese traders will certainly give priority to Vietnamese pepper. On that basis, the Import-Export Department (Ministry of Industry and Trade) forecasts that Vietnam's pepper exports will increase by the end of the year thanks to the increased consumption demand from the foreign market and high prices.

However, according to VPA, the remaining amount of pepper is little. It is estimated that in the remaining 2 months of the year, the amount of pepper left for export is about 25,000 - 30,000 tons. With the current export price at about 4,000 USD/ton, the total export value in the last two months of the year is approximately 100 million USD.

By calculations, in the entire year of 2021, the export value of pepper is forecasted to reach about 900 million USD. Although the USD 1 billion mark is yet to be reached again, this is a very important basis for pepper exports to return to this mark next year, when pepper prices on the world market are on an upward trend.