Pepper growers add spice to pricing tactics

Many pepper farmers have taken advantage of the internet to ensure quick access to world pepper prices and other useful market information.

Farmers who improved the way they use up-to-date market information stand to gain hundreds of millions of dong in profit, according to Tuoi Tre (Youth) newspaper.

Farmer Nguyen Van Hien in the southern province of Binh Phuoc’s Loc Ninh District is one of them.

Hien said he had been using the internet to keep track of world and domestic demand for the spice for months.

He said he stockpiled pepper in a warehouse after getting information on the internet that world pepper output was forecast to drop, with pepper prices set to increase during the rest of the year.

The forecast proved correct, as just two months later pepper prices rose to VND120,000 (US$5.7) per kilogram from VND100,000 ($4.7) per kilogram. The farmer earned VND80 million ($3,800) extra after selling four tonnes of his pepper stockpile.

Increasing numbers of farmers are now hoarding pepper to maximise profits.

Farmer Nguyen Ba Thinh, who also grows pepper, said he did not want to sell at the current pepper price of VND100,000 per kilogram, as countries such as India, Indonesia and Brazil had bad pepper harvests this year while world demand for pepper had risen by 5 per cent.

“I will sell the rest of my pepper only when the price increases to VND150,000 ($7.1) per kilogram,” Thinh said.

The farmer has stockpiled six tonnes of pepper. In previous harvests he sold ten tonnes of pepper and used the profits to buy a plot of land in HCM City.

Chief of the Viet Nam Pepper Association secretariat Tran Duc Tung said farmers today were different from farmers in the past who only focused on production and let traders call the shots on prices.

“Farmers today have access to the internet and timely information on prices, so now they are the ones who decide what the price should be,” said Tung.

Addressing a conference held by the Viet Nam Pepper Association recently, chairman Do Ha Nam said that with the ability to closely follow world market prices and stockpile harvests, farmers had become empowered.

Pepper farmers had this advantage over other farmers as it was easier for them to stockpile pepper and put aside some money for a rainy day, Nam said.

“Farmers log on every morning to check prices and only sell their pepper if they think the price is right,” he said, adding that as a result, enterprises sometimes find it difficult to buy pepper for production and export.

A representative of an Indian pepper export company (whose office is located in HCM City) said it was becoming harder to secure pepper from farmers.

“Many companies and agencies now have to plead with pepper growers to buy their pepper,” he said.

An agency owner Nguyen Thi Thuy said farmers had informed her that they were hoarding pepper and would only sell at good prices.

Unlike the same period in the previous year when her agency was able to buy about ten tonnes of pepper, this year she could only buy several hundreds of kilogrammes.

Deputy director of Binh Phuoc Province’s Industry and Trade Department Nguyen Quang Canh said it was not risky for farmers to hoard pepper and wait until prices rise as pepper output had significantly reduced in many countries.

According to the International Pepper Community, world pepper output this year will fall by about 6,500 tonnes against 2010 to 310,000 tonnes due to unfavourable weather conditions and pests in several producing countries.

The Viet Nam Pepper Association said Viet Nam pepper output had made up 30 per cent of total global pepper output. The country exports about 100,000 tonnes of pepper each year.

Viet Nam pepper products are currently exported to 80 countries and territories, the association said, with the EU being the country’s largest buyer.

The country has 50,000ha under pepper cultivation at present, mainly in six provinces of Binh Phuoc, Gia Lai, DaK Nong, Dong Nai, Ba Ria-Vung Tau and Dak Lak. – VIR

Tags: Vietnam Pepper, Vietnam Pepper prices