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Pepper prices are forecast to continue to increase in 2022
Feb
Pepper is one of the commodities with strong price increases in 2021. In 2022, pepper prices are forecast to continue to increase. Like in Vietnam and around the world, pepper prices in the Indian market also increased sharply. With rising prices and market advantages, Vietnam pepper exports target 1.05 billion USD.
Pepper prices are forecast to continue to increase in 2022
The Vietnam Pepper Association (VPA) forecasts that Vietnam’s pepper output will cause pepper prices to increase in 2022.
– In a recent report, VPA said that the pepper supply-demand balance in 2022 will gradually return to equilibrium. Global pepper production in 2022 is forecast to be lower than demand, but 2021 inventories can help meet 2022 demand.
– However, pepper production in Vietnam continue to be at a disadvantage due to the impact of climate change and objective reasons such as high fertilizer and labor costs. Therefore, in 2022 Vietnam’s pepper output will decrease compared to 2021, which will make pepper prices continue to increase.
– Along with the increase in prices, the sharp increase of input factors due to inflation caused the profits of enterprises to decrease significantly. In particular, sea freight rates have increased by more than 500% in the past year. World inflation in 2022 is forecasted to have a strong impact on the global supply chain, including pepper.
– According to information from the International Pepper Association (IPC), the total global pepper production in 2021 is estimated at 514,950 tons, down 61,050 tons, or 11% lower than in 2020. In which, pepper production decreased in Vietnam, Brazil and Malaysia but increased slightly in Indonesia, India and Sri Lanka. Generally, low prices in recent years are no longer attractive. So pepper farmers have reduced investment costs, leading to a decrease in global pepper production in 2021.
– In 2021, global pepper enters a bullish cycle. The scarcity of goods in many major pepper producing countries in the world along with the increase in freight rates has pushed pepper prices to increase sharply by 45-55%.
Pepper prices in the Indian market increased sharply
Indian pepper is a commodity that has been appreciated for both quality and quantity for many years. However, in recent times, many influences cause the quantity of pepper in India to change, leading to a sharp increase in prices.
– Indian pepper prices have started to increase in the past few months due to increased domestic demand. With an increase of more than 30% over the same period last year. Indian pepper prices have surpassed Rs 500/kg, which is the highest price in the past 4 years since 2017.
– This increase in prices is partly due to concerns that production will decrease in the next harvest because the harsh climate affects the pepper harvest. Karnataka is the main pepper-producing state of India, followed by Kerala.
– One reason is many shipments of illegal pepper were imported from Vietnam through Myanmar to the northern Indian market. After that, the new government came to power in Myanmar. Stopping this illegal business making the source of goods even more scarce.
– India’s pepper market share in exports is currently very low due to high prices. Unlike Vietnam and Brazil, which depend on exports, India has a large domestic market. The increase in freight rates and the shortage of containers have affected pepper shipments, freight rates to the US have increased fivefold to $15,000/container, the US is looking for supplies from Brazil.
Vietnam pepper exports target 1.05 billion USD
Pepper prices continuously increase at the beginning of the harvest season, the export market is favorable, Vietnam’s Ministry of Agriculture and Rural Development has set a target of exporting enterprises to bring pepper back with a turnover of about 1.05 billion USD.
– According to calculations from statistics of the General Department of Vietnam Customs, in 2021, black pepper exports reached 194,000 tons, worth $664.11 million, down 17.2% in volume, but up 29.6 % in value compared to 2020. In 2021, the Vietnamese black pepper export market reached more than 100 countries and territories.
– Meanwhile, Vietnamese white pepper exports reached approximately 22.3 thousand tons, worth 113 million USD, up 1.0% in volume and 56% in value compared to 2020.
– It is worth nothing that the structure of Vietnamese pepper exports has changed. The pepper industry increased exports of white pepper and ground white pepper, while exports of black pepper and ground black pepper decreased. However, black pepper is still the main export product, accounting for 74.3% of the total volume and 70.8% of the total export value of pepper.
– The Agency of Foreign Trade forecasts that in 2022, export pepper prices will continue to stay high. Due to the continuous increase in pepper prices and favorable export markets, the Ministry of Agriculture and Rural Development of Vietnam aims to export pepper with a turnover of about 1.05 billion USD.
The US increase pepper imports from Vietnam market next year
– In 2020, the United States increased pepper imports in many main supplying markets, such as Vietnam, Brazil, Indonesia.
– Statistics from the United States ITC show that in the first 11 months of 2021, the US imported 58.1 thousand tons of pepper from Vietnam. The amount of imported pepper worth $211.47 million, up 8.3% in volume and 45% in value. Vietnam’s pepper market share in total US imports increased from 66.6% in 11 months of 2020 to 68.25% in 11 months of 2021.
– With positive growth numbers, the export pepper industry in Vietnam will achieve good growth numbers, increasing the value of pepper in the international market.
– In terms of pepper supply structure to the US, Vietnam’s pepper industry is a potential source in the future.
– Data from the European Statistical Office (Eurostat) show that, in the first 11 months of 2021, France imported 11,750 tons of pepper, worth 48.19 million euros, up 5.8% in volume and 25.9% in value over the same period in 2020.
– In the first 11 months of 2021, the average import price of French pepper increase of 19% over the same period in 2020. In which, the average import price of pepper from most foreign markets increased sharply.
– France increased pepper imports from Vietnam and Indonesia, but sharply decreased imports from Brazil. In the 11 months of 2021, France imported 4,795 tons of pepper from Vietnam, worth EUR 15.6 million. Its up 14.8% in volume and 49.2% in value over the same period in 2020. Vietnam’s pepper market share in French imports increased from 37.61% in 11 months of 2020 to 40.81% to same time in 2021.
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