After reaching the threshold of nearly 200,000 VND / kg, the price of pepper began to decline and fell sharply in recent weeks, currently at 150,000 VND / kg. The question is whether pepper prices are at a recession, or are current prices real and reflect the market supply and demand?

 

Area increased so prices must fall

Over the past few weeks, pepper prices have started freezing, from VND 200,000 per kilogram in September 2015 to around VND 150,000 per kg on the last day of February. 2016.

 

According to P.S., director of a pepper export business, there are two reasons for pepper prices to fall. Firstly, recently, on the mass media, Vietnam's official authorities officially announced pepper cultivation area of ​​Vietnam reached the threshold of 100,000 hectares, two times higher than planned and also Far exceeds the figure previously forecast by the Vietnam Pepper Association (VPA).

 

"In commodities, especially agricultural products, demand and supply are always a determining factor in the price of a certain commodity, and pepper is no exception," he said. According to Mr PS, when Vietnam has only 50,000 hectares of pepper, Vietnam's pepper accounts for 30% of world production and accounts for 50% of global pepper consumption, ie every 2 kg of pepper traded worldwide. There is 1 kg of production in Vietnam.

 

Therefore, if pepper production in Vietnam is affected by a factor such as drought, pests ... the price will be pushed up. Conversely, when Vietnam officially announces 100,000 hectares of pepper, commercial companies will base on that to calculate the pepper produced and exported by Vietnam.

 

"If the average yield of Vietnamese pepper is 2.6 tons per hectare, after subtracting the newly-planted pepper area from harvesting, the pepper output that Vietnam can produce in five years. This is at least 200,000 tons. Thus, the world's supply shortage of pepper is no longer, and based on this factor, pepper prices will decrease, "said S..

 

The second reason, according to P.S recently, Spain has warned the black pepper of Vietnam from the Carbendazim fungicide exceeds the limit. Although the country has recently applied special control measures, but has not suspended imports of pepper in Vietnam, this information is a pretext for international trading companies to invoke pepper prices. Vietnam.

 

Farmers will temporarily stock up if prices fall

 

Pepper price of Vietnam started to increase sharply from the second half of 2010 when it reached 80,000 VND / kg (July 2010) and continuously increased, reaching a peak of 200,000 VND / kg in September -1515. Pepper export value also increased from US $ 419 million in 2010 to US $ 1.26 billion in 2015, up nearly three times year-on-year.

 

 

To answer this question of the Saigon Times Online, Do Nam Nam, Chairman of the Vietnam Pepper Association (VPA), said pepper prices in the market will not increase forever but to a certain extent will have to reduce. The remaining problem is that as the world's number 1 grower and exporter of rice, what will Vietnam do to control pepper prices in the new market is important.

 

The long way of farmers is when the price of pepper decreases, they will store, not rushed. At that time, the market will not have more supply, pepper prices will have to be stable, can not reduce further. Then, when prices are at a favorable level, farmers and businesses sell. That is why in recent years, there have been months when the price of pepper on the market decreased but looking at the data for a whole year, pepper prices in Vietnam tended to increase.

 

According to Nam, unlike coffee, in recent years, the price of pepper has been high, farmers have become better off, so when pepper prices are low, pepper farmers are not pressured by the source. Financial to cover the cost of living of the family should be able to retain to regulate the market.

 

"In the past few years pepper prices have increased in part because farmers use the strategy of selling when prices increase, stop selling when prices fall, so the price of pepper world," Nam said.

Ngọc Hùng (thesaigontimes.vn)