In pepper export market, Vietnam remains a sleeping giant

Though Vietnam is a big pepper exporter in the world, it still cannot dominate the world market. Compared to the export prices of other countries around the world, Vietnam’s pepper export price remains very low.

Agricultural exports have been considered the most outstanding achievement of Vietnam’s export-oriented economy in the last 25 years. Besides rice and cashew nuts, pepper is a product which will soon bring the “gold medal” to Vietnam in conquering the world’s market.

There are no reliable documents that state when the “spice of the king” was first grown in Vietnam. Some statistics sources said half a century ago, Vietnam only had 300 hectares of pepper growing area, and the figure increased slightly to 426 hectares 20 years later. At that time, Vietnam’s pepper growing area just accounted for 0.2 percent of the global pepper growing area.

A big change occurred in 1981, when the pepper growing area jumped to 900 hectares, raising Vietnam’s pepper growing area to 0.4 percent of the global area. The growing area reportedly reached 2176 hectares in the period before “doi moi” (renovation process), which accounted for one percent of the global area. In 1981, for the first time, 100 tons of pepper grown in Vietnam were exported to the world.

The second breakthrough was in 1985, when doi moi was launched, the growing area soared to 3900 hectares, raising Vietnam’s growing area to 1.5 percent of the global growing area. In that year, the export volume soared to 1300 tons. The higher achievement was obtained in the next year 1986, when the export volume increased to 3133 tons.

The figures all show that in years of war and in the subsidization period, Vietnamese pepper growers lived a miserable existence. However, in the difficult years and n the threshold of doi moi Vietnam realized that nature favored Vietnam and gave it great potentials to develop the “spice of the king”.

Pepper can only be grown in 39 countries and territories, of which only 22 have the growing areas of more than 1000 hectares, and only seven countries have the growing area of more than 10,000 hectares. Of these countries, India, with 197,300 hectares, provides 39 percent of the total global output, while Indonesia ranks the second biggest exporter with 117,500 hectares and 23.2 percent. Vietnam ranks the third with 50,000 hectares and 9.2 percent (the figures of 2008).

This means that the “spice of the king” is sensitive to climate and soil, therefore, pepper can only grown in a few of countries out of nearly 240 countries and territories in the world. The three leading nations accounted for 72.1 percent of the total output. Meanwhile, the top leading nations, if counting on Sri Lanka and Brazil, account for 84.7 percent.

The biggest advantage of Vietnam’s pepper is that with good conditions in climate and soil and with good varieties and production skills, Vietnam’s pepper yield is very high in comparison with the average level in the world, 1966 kilograms per hectare, or 2.4 times higher than the average yield. Meanwhile, the productivity in Indonesia has been decreasing in the last decade, while India’s productivity goes up and down.

With expanded pepper growing areas and rapidly increasing productivity, Vietnam exceeded Brazil to become the third biggest producer in the world in 1997. In 2002, Vietnam exceeded the giant India and in 2007, surpassed Indonesia.

In 2001, with a big leap to 57,000 tons in export volume, Vietnam surpassed both Singapore and Indonesia . And with the high growth rate of 15.6 percent per annum, it is clear that Vietnam has no rival in the pepper market.

However, despite the great achievements, Vietnamese pepper growers and exporters are not happy, because Vietnam has been selling products for the past three decades at prices too low. Statistics show that except for in 2007, 2008 and 2000, the products exported in the remaining years only hovered around 80 percent of the world’s price. Especially, in 1993-1996, the export prices were so dirt cheap that they were just equal to 50 percent of the average export prices in the world.

In principle, Vietnam can be consider a giant pepper exporter in the world, and with the overwhelming exports Vietnam can control the world prices. However, it seems that Vietnam remains a sleeping giant and Vietnamese exporters still hope that the “era of Vietnam’s dirt cheap pepper” will end soon.-Thoi bao Kinh te Saigon

Tags: Vietnam Pepper, Vietnam pepper exports