A Vietnamese “black gold” agricultural product reaches 100,000 VND/kg

Black pepper has been compared to “black gold” in Vietnam because this commodity has high economic value. However, over the past decade, the Vietnamese pepper industry has experienced ups and downs, with prices dropping to 34,000 VND/kg at one point and currently hovering at 92-95,000 VND/kg.

In a conversation with a reporter from Người Lao Động Newspaper on the sidelines of the International Conference on Vietnamese Pepper and Spices – VIPO 2024, taking place from March 8 to 10 in Hanoi, Ms. Trịnh Thanh Thảo, Director of Viet Linh Trading Co., Ltd., said that in the early months of this year, the company received export orders for about 100 tons of spices in general to Middle Eastern markets. Pepper prices are high and demand for imports is high.

According to Ms. Nguyễn Thị Thanh Huyền, Deputy Director of Prosi Thăng Long Company, since December 2023, pepper prices have increased dramatically and continue to rise. In 2024, many farmers and businesses are expecting new price prospects for the pepper industry.

By this time, the above-mentioned company has received some orders for the second quarter of 2024. The high prices, however, also come with certain risks. According to Ms. Huyền, due to farmers limiting sales, it is difficult for businesses to collect goods.

Meanwhile, Ms. Hoàng Thị Liên, Chairwoman of the Vietnam Pepper Association (VPA), also assessed that pepper is entering a price increase period due to the reduced supply from Vietnam and major exporting countries like Brazil due to unfavorable weather conditions.

Surging prices, cautious risks for businesses

“With the pressure on supply, it is hoped that there will be a positive impact on prices. This is the driving force for farmers to pay attention to their fields, expand their areas, and improve quality,” said Ms. Liên.

According to the Chairwoman of VPA, pepper prices may continue to rise until the market saturation level is reached, and supply and demand are balanced, but it is difficult to predict the exact number.

In terms of business, the Chairwoman of VPA recommends participating in the market cautiously. If prices rise suddenly, it will affect the profits of orders and pose risks to the businesses themselves. Therefore, businesses need to evaluate and take a long-term view of price trends to have suitable strategies.

In the short term, VPA predicts that prices will continue to trade at a high level due to the driving factors mentioned above. However, it is difficult to provide forecasts in the medium and long term due to the instability caused by political factors and the impact of climate change.

Among these factors, political factors have continued to affect the global economy, especially in Europe and America, leading to low consumption demand for goods, including pepper, in recent times. It is expected that purchasing power in these two markets will remain low in the near future, making it difficult for pepper prices to stabilize in 2024.

In addition, another influencing factor is the continuous increase in interest rates by the Fed to control inflation, resulting in the reversal of the flow of USD into the US. This has caused many countries to lack USD and have to restrict foreign currencies for non-essential imports, including pepper.

Furthermore, some of the challenges facing the Vietnamese pepper industry at present are unpredictable climate change and increasingly stringent regulations in important markets.

Therefore, in order for Vietnamese pepper products to establish a sustainable position in the global market, the pepper industry needs to increase its ability to apply international standards such as the Rainforest Alliance and organic standards. Especially in terms of issues such as chemical residue, sustainable production criteria in terms of economics, society, and the environment.