In recent days, there has been a rush to buy pepper, which has led to a sharp rise in prices, and the price of black pepper is now around 62 yuan. So, how long can pepper prices go up? When will this craze end?
Pepper price trend in June
On May 31, the price of black pepper in Vietnam was between 41-42 yuan, and the price of white pepper in Hainan was 60-61 yuan; On June 7, the price of black pepper rose to 52.5 yuan, and the price of white pepper and Hainan pepper ranged from 69 to 71 yuan, and on June 11, the price of black pepper rose to 60.5-61 yuan, and Hainan white pepper was 80.5-82.5 yuan.
Vietnam, domestic production capacity declined
The world's pepper exporters are Vietnam, Brazil, India, Malaysia and Indonesia, with Vietnam having the largest market share in the world. Affected by the global new crown epidemic in 2020, Vietnam's global market share of black pepper has dropped from about 80% to 65%-70%, and at the same time, the production capacity of other countries has also shown a significant downward trend. As of 2023, the Vietnam Pepper Association said that the pepper production in 2023 will reach about 185,000 tons, and the global share of Vietnamese pepper will fall to around 42%, so the global pepper production is 440,000 tons, compared with the peak of more than 500,000 tons, a significant decrease.
From the point of view of the distribution of production areas, the tropical areas of the mainland have limited suitable planting area and are not the main producing countries. According to statistics, the national pepper production in 2020 was about 512,000 tons, in 2021 it was about 439,000 tons, in 2022 it was 420,000 tons, and in 2023 it was 440,000 tons.
Current status of pepper cultivation in Vietnam
At present, more and more old pepper orchards in Vietnam are being replaced by new orchards and plantations, and the diversification of planting makes the risk of growers relatively buffered compared to the single cultivation of a certain crop affected by market price fluctuations. Although pepper prices have soared this year, doubling profits has indeed increased farmers' motivation to plant, but it has not triggered large-scale new planting. Especially after the lessons learned from the massive expansion in 2017, farmers are cautious about expanding pepper plantations.
In the central highlands and southeastern regions of Vietnam, the cultivation of high-value trees such as durian and coffee has expanded rapidly, and their prices have also risen due to the dry weather, and these profits are not inferior to the doubling of pepper.
The reason behind the rise in pepper prices
First, the impact of the El Niño phenomenon in the production area and the reduction of planting area have led to a significant decline in production and tight supply. Second, the strong increase in demand from exporting countries has also contributed to the price increase to a certain extent. Third, for example, the rapidly rising black pepper has attracted speculation and speculation of funds by market speculators; Fourth, the delivery of orders in the first and second quarters has increased the procurement efforts of the market; There is also the rising cost of sea freight due to geopolitical influences.
How long can the price of pepper go up?
At present, pepper prices are entering a new upward cycle. Since pepper production has not been able to increase significantly in a short period of time, its high prices have supported it, and the upward trend may be longer than in previous cycles.
Note: The information comes from the Internet. If the unit is not specifically indicated, it is "yuan/kg", and the above information is for your reference only!