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Continued price drop makes Kingdom’s pepper unprofitable

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Dar-Memot Pepper Agriculture Development Cooperative executive director Yin Sopha says the market price for non-GI pepper is still under the margin of cost production. Pha Lina

Continued price drop makes Kingdom’s pepper unprofitable

The Kingdom’s non-GI pepper farmers continue to struggle due to low prices while cultivation is projected to decline next year, said Dar-Memot Pepper Agriculture Development Cooperative executive director Yin Sopha.

Sopha said the market price for non-GI pepper this year is still under the margin of cost production, as the sector is expected not to expand next year.

Since the beginning of the harvest season, pepper prices have stood at $2.6 per kg, which are under the profit margin. He said the lower price is due to the global market.

“Pepper prices cannot increase anymore, as the pepper industry’s global supply is more than the need – the price is not beneficial for farmers and the growth of cultivation will not increase anymore.”

Sopha said that the sector would no longer be a viable investment option if prices keep dropping.

A new federation

As of 2016, the Kingdom had 5,000ha of pepper fields, according to a report from the Ministry of Agriculture, Forestry and Fisheries, which claimed the country’s pepper exports grew from 1,050 tonnes in 2016 to 2,698 tonnes last year.

The government has formed a new federation for the country’s pepper industry to enhance the market and solve challenges in the sector, as the cash crop is currently facing depressed prices.

The Cambodia Pepper and Spice Federation was jointly formed last month by the Ministry of Commerce and the Ministry of Agriculture, Forestry and Fisheries.

The federation will promote the value of pepper and look for new markets, especially for non-GI pepper so that farmers will not rely on informal exports to Thailand and Vietnam.

AMRU Rice (Cambodia) Co Ltd CEO Song Saran, who has been elected as the federation’s president, said it was looking for technical assistance before setting up to address key issues.

“We have no update yet about pepper prices. Right now we are looking for technical assistance to support the federation. We will address the key issues happening now and formulate further action,” he said.

Vorn Savourn, a pepper farmer in Tbong Khmum province’s Memot district who owns a 5ha pepper field, said the industry still relies on informal buyers.

“I have no hope for an increase in pepper prices. Most [pepper] farmers here [are considering selling their farms] since they cannot pay back loans,” he said, adding that pepper farming is no longer a good choice for farmers as there is no sustainable market.”

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