Pepper prices skyrocketed, making it difficult for purchasing businesses

Pepper is still available among the people, but they do not sell it massively, but sell it in small doses to listen to the price. Pepper prices fluctuate by hour. In the afternoon, people quote one price but at noon the next day they quote another price.

According to the Vietnam Pepper and Spice Association (VPSA), pepper prices exceeded 160.000 VND/kg, the increasing price trend occurred in all markets, not just Vietnam due to lack of supply.

All markets increased, not just Vietnam. In Brazil, normally, this market's prices are lower than Vietnam's, but now they are even higher than Vietnam's. The latest world pepper price update from the International Pepper Association on June 9 said that Brazilian pepper price is at 6 VND/kg while Vietnam pepper price is at 195.989 VND/kg.

Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association (VPSA), domestic pepper is increasing steadily, increasing by a few thousand VND/kg each day. Pepper is still available among the people, but they do not sell it massively, but sell it in small doses to listen to the price.

At the end of May 5, pepper price was about 2024 VND/kg. But in just the first 140.000 days of June 10, pepper prices increased by more than 6 VND/kg, in some places up to 2024 VND/kg. It is predicted that pepper prices will cool down a bit in the near future but are unlikely to return to the same price level.

According to Ms. Hoang Thi Lien, there is no speculation in the pepper market. For speculation, you have to buy a lot, but at this time, no business buys thousands of tons of pepper.

Rising pepper prices make it very difficult for businesses to purchase. Because the amount of goods sold on the market is not abundant, if this farmer household does not sell, it is quite difficult for businesses to buy from other farmer households.

If pepper prices are high, people will be happy. But for businesses, it is difficult to trade and sell. Because the contract when closing with a customer, for example, is 150.000 VND/kg, but when it comes back to purchasing from people, 150.000 VND/kg cannot be bought. Meanwhile, businesses also have to bear costs of loss, processing, bank interest rates...

Less export volume and higher export prices are good for people, but for businesses, the profit earned is not necessarily equal to the rate of increased export prices, because businesses have contracts signed in advance and until the end. Now they just deliver.

Or businesses signed last year and only delivered this year, or signed at the beginning of the year but only delivered at the end of the year. Businesses cannot fully predict the price increase so quickly. Part of the business is self-owned, part of it has to be bought from outside. For example, when signed on February 2, the price was only 2024 VND/kg but now it has increased to nearly 90.000 VND/kg.

According to Ms. Lien, in the context of rising prices, it is difficult for businesses to proactively source goods. People's psychology is that when they see high prices, they are very happy but still want more price increases. This is also a worthy benefit for people when there is a time when they fall into a cycle of low prices. In this context, businesses are also struggling, war, ship prices, trade risks...

On May 5, Vietnam's pepper exports to China reached 2024 tons, an increase of 3.137 times compared to the previous month and the highest level in the past 4,8 months.

At the end of the most recent trading session, the International Pepper Community (IPC) listed Lampung (Indonesia) black pepper price at 5.635 USD/ton; Brazilian black pepper price ASTA 570 is at 7.700 USD/ton; Kuching (Malaysia) ASTA black pepper price remained at 4.900 USD/ton. Muntok white pepper price 7.425 USD/ton; Malaysian ASTA white pepper price is still at 7.300 USD/ton.

Vietnam black pepper price is trading at 6.500 USD/ton for 500 g/l type; 550 g/l at 6.700 USD/ton; White pepper price is at 9.500 USD/ton. The International Pepper Community commented that this week's pepper market showed a positive outlook when no country reported a decrease.

Source: Vietnam.vn