Peppercorn exports on record pace through July

In 2014, the nation’s exporters shipped 156,396 metric tons of the treasured spice valued at US$1.2 billion to 100 markets around the globe, the highest figures in both volume and value ever recorded, said Vietnam Customs.

Those figures represent an increase of 16.38% in volume and 34.72% in value over 2013 and there has been little change in global demand for the commodity during the current year.

However there is a global shortage of supply and that has propped up sales prices in the early months of the year, keeping them hovering up 30% on-year at around US$9,302 per metric ton.

For the seven months leading up to August, the volume of exports dropped by 20.6% to 92,430 metric tons compared against last year’s corresponding period, but revenue inched upwards by 2% to reach US$864.117 million.

The higher sales prices should hold throughout the remainder of the year and compensate for the decreased volume resulting in overall revenues for the year equal or exceeding last year’s figure, said Vietnam Customs.

The Ministry of Agriculture and Rural Development (MARD) in turn has reported that peppercorn cultivation areas have also moved upwards this year to reach roughly 70,000ha with estimated productivity of 2.4 tons per ha.

If one extends the math, at current sales prices that calculates out to total potential revenues coming in a close second to last year at US$1.1 billion and if the stars line up— possibly exceeding last year, said MARD.

Improving the quality of peppercorns

The Vietnam Pepper Association (VPA) shared the views of MARD and also forecasts that the global shortage will support higher prices throughout the remainder of the year.

The VPA said in its report the US, EU, Japan, Republic of Korea (RoK), and Australia were the key consumers for the seven months period, accounting for 60% of market share.

However, these markets impose strict requirements on the quality of product the VPA cautioned, adding that the agricultural industry needs to step up its game and concentrate on producing first-rate peppercorns.

For his part, Ha Huy Thang, Petrolimex International Trading Joint Stock Company (Pitco), said since the third quarter of 2013, the EU has warned of pesticide residual on Vietnam black peppercorns on several occasions.

Last year, the EU even returned several shipments of Vietnam products and some EU countries went so far as to switch to importing their peppercorn orders to India or Brazil.

To better deal with the issue Thang proposed MARD devise and implement policies and procedures to improve cultivation areas and apply Vietnamese Good Agricultural Practices (VietGap) at all levels in the planting, growing and harvesting process.

In addition, Thang recommended using part of funds from the World Bank (WB) and other international organisations to reward farmers for innovating and producing safer peppercorns, and deal out harsher sanctions for improper use of pesticides.