Pepper prices in Vietnam rose to a one-year high last week, driven by Chinese consumption recovery and higher demands from local businesses.
Farmers in the Central Highlands and the south of Vietnam sold pepper at 48,000-50,000 dong ($2.08-2.17) per kg on Wednesday, depending on the location, a 26.6-31.1 per cent increase from last month, reported tintaynguyen.com.
The price in Ba Ria-Vung Tau province reached 50,000 dong, the highest since January last year.
Domestic pepper prices have surged in the last few weeks because the Chinese market has recovered from the deadly Covid-19 pandemic, and local companies have stepped up buying to fulfil their contracts.
Vietnam Pepper Association (VPA) president Nguyen Nam Hai said: “Recently, pepper prices have increased. There are several reasons for this improvement. Firstly, Covid-19 in China is basically over, so demands from Chinese customers are higher.
“Secondly, many local businesses sold their stock before the contracts were due, so now they are rushing to buy pepper from farmers to meet demands from their customers,” said Hai
With the surging prices, farmers have stopped selling their stock, pushing prices even higher, he added.
However in the long term, the pepper prices are unlikely to see a spike like this because of a global supply glut.
Hai said: “In general, since 2014, Vietnam and many countries such as Brazil and Cambodia have expanded production areas.
“While global annual production growth is around eight per cent, consumption growth is just around two per cent. So in the long term, pepper prices are unlikely to increase like they used to.”
Ministry of Industry and Trade data shows that Vietnam has about 100,000ha of pepper area with capacity of 247,000 tonnes.
Coffee in the Central Highlands, Vietnam’s largest coffee-growing area, also witnessed growth of around eight per cent compared to last month to 31,600-32,000 dong per kg on Wednesday.
VIET NAM NEWS/ASIA NEWS NETWORK