15:16 | 04/08/2015 Trade
(VEN) - Pepper output is predicted to reach about 126,000 tonnes this year with export value expected to reach US$1.1 billion. However, peppercorn still account for 83 percent of pepper exports, so export value is unlikely to increase.
Vietnam is a world-leading pepper producer and exporter. According to the Ministry of Agriculture and Rural Development (MARD), the whole country currently has about 70,000ha of pepper under cultivation, with those in southeastern provinces accounting for over 50 percent of the total area, the Central Highlands accounting for 31 percent, and central provinces 19 percent. The country’s average yield is 2.16 tonnes of dry pepper per hectare, the highest in the world.
A recent report by the Vietnam Rural Industries Research and Development Institute (VIRI) showed that 95 percent of Vietnamese pepper output was for export. Vietnamese pepper accounts for 40 percent of global output and an over 50 percent of the world pepper market (more than 120,000 tonnes). Last year, Vietnam exported a record US$1 billion worth of pepper.
Statistics from the Vietnam Pepper Association show that in the first five months of this year, Vietnam exported 72,000 tonnes of pepper, earning US$657 million. To achieve the 120,000 tonne annual export target, only an additional 40,000 tonnes will be needed to be exported in the last seven months.
More than 200 businesses currently directly export Vietnamese pepper, about 30 of which are foreign invested companies. Major export markets include the US, Germany, Saudi Arabia, the Netherlands, Singapore, India, Egypt, Spain, and Pakistan. Some 36 percent of Vietnamese pepper exports are to Asian countries, 34 percent to Europe, 20 percent to the US, and 10 percent to Africa, according to the Vietnam Pepper Association.
Focusing on processing
Vietnam mostly exports black and white peppercorn. Statistics from Trademap - an International Trade Center database providing updated trade statistics, show that the export value of Vietnamese peppercorn has grown 23 percent annually, and that peppercorn accounts for 83 percent of the total export value, while ground pepper accounts for a mere 17 percent.
MARD has therefore provided guidelines for businesses to invest in upgrading existing pepper processing plants, including 14 high quality pepper processing facilities, to increase their capacity, while at the same time building new facilities to process white pepper in order to raise the percentage of white pepper exports to 30 percent and pepper powder to 25 percent by 2020.
Pepper businesses have complained that due to outdated processing technology, Vietnamese pepper products were of unequal quality and often faced price pressures. So Vietnam has to export pepper at lower prices than other countries. In the context of growing global demand for ground white pepper, the Vietnamese pepper sector should persify products and increase processing to raise product value. To do this, it very much needs state support.
India is the largest importer of Vietnamese pepper. In 2014, it imported about 8,000 tonnes of Vietnamese pepper, equal to over 90 percent of the total import volume.
Quynh Nga & Lan Anh