Vietnamese Pepper – On The Way To Glory

Vietnam was the major pepper exporter in the world with a record volume and value in 2009. The volume of white pepper exported to European and U.S. markets increased significantly.

At the Annual Pepper Conference 2009 held in early May, Mr Nguyen Ha Nam, President of the Vietnam Pepper Association, said: Vietnamese pepper is still developing with growing export volumes and values expected for several decades to come. However, in addition to favourable conditions, the industry is still encountering difficulties and challenges.

Global pepper output reached 298,000 tonnes in 2009, and Vietnam produced 261,000 tonnes. Global pepper export volume totalled 261,000 tonnes, and Vietnam accounted for 253,000 tonnes. As a result, Vietnam retained its largest exporter position since 2003.

Especially, the volume of exported white pepper rose 126 percent from 2008 to 22,532 tonnes, or an increase of 12,556 tonnes. Ground black pepper and coffee export volume reached 10,596 tonnes, mainly conducted by Nedspice and VKL Vietnam.

Following last year’s success, the Vietnamese pepper industry continues to make success in 2010. According to the General Statistics Office (GSO), in the first quarter of 2010, Vietnam exported 28,061 tonnes of pepper worth US$84.9 million, of which black pepper was 22,716 tonnes worth of US$63.8 million and white pepper accounted for 5,345 tonnes valued at US$21.1 million. Compared with the same period in 2009, the first quarter export volume was up 4.5 percent, or an equivalent of 1,216 tonnes, while the value climbed 29.6 percent, or an equivalent of US$19.4 million.

Export progress was even throughout 2009. Thus, companies and farmers avoided losses when selling prices slumped. Unlike other industries, pepper is never sold below production cost. That is the success of the Vietnamese pepper industry.

In 2009, the Vietnam Pepper Association (VPA) had 42 direct exporters with 120,177 tonnes, accounting for 89.5 percent of the total export volume. The ten top exporters shipped from 4,000 tonnes to 19,000 tonnes each, including Phuc Sinh, Olam, Intimex HCM City and Ngo Gia. The Vietnam Pepper Association has attracted more than 13 foreign companies from India, the Netherlands and Japan to build processing plants in Vietnam to turn out products of higher quality and export to more countries. For instance, the Japanese-invested KSS Company in Binh Duong province currently holds 25-30 percent of the pepper market in Japan.

Apart from those successes, many pepper companies have experienced difficulties and challenges like price volatility. Sometimes, pepper prices in China surged to VND67 million per tonne but then slumped to VND29 million; thus, exporters must closely monitor world economic developments, financial situations of companies, market purchasing power and the solvency of partners, said Mr Phan Minh Thong, General Director of Phuc Sinh Company.

Besides, Vietnamese businesses have to verify the skills of foreign partners, and study the business practices and rules of importing nations to avoid unnecessary losses, said Mr Nguyen Van Thu, General Director of Truong Loc Company.

At the meeting, Mr Nguyen Thanh Bien, Deputy Minister of Industry and Trade, expressed his hope for the continued leadership of the Vietnamese pepper industry on the global export chart. He hoped the Vietnamese pepper industry will follow appropriate planning and apply production and processing standards to make pepper a key agricultural export of Vietnam.

Tags: Vietnam Pepper, Vietnam pepper exports