Date: July 17, 2003
Source: Saigon Times
Author:

Vietnam is suffering from depressed pepper prices as supply strongly outpaces demand on the world market, and the curative measures are to enhance the quality of the spice and diversify markets, heard a meeting of the pepper association.
The country shipped abroad 43,200 tonnes of pepper in the Jan-June period, a fall of 5,200 tonnes from the year-earlier period, mainly due to falling prices, vice chairman of the Vietnam Pepper Association Do Ha Nam said at the review meeting early this month.

The export earnings also saw a proportionate fall to US$58 million in the first six months from US$64.66 million in the corresponding period last year.

Nam quoted figures from the International Pepper Committee, forecasting that the world's demand for pepper is 200,000 tonnes this year compared to a total supply of 300,000 tonnes. This surplus has depressed pepper prices in all pepper exporting countries in the past few years.

Participants at the meeting agreed that improving quality and diversifying markets are the measures of utmost importance if the country is to maintain its export competitiveness.

Nearly one-third of the pepper acreage in Vietnam is older than 10 years, so the produce is not up to export quality, they said. Furthermore, outdated processing facilities also affect the pepper quality.

Therefore, re-zoning pepper growing regions and increasing spending for pepper processing are the urgent measures, they said.

Pham Van Bien, head of the Southern Institute for Science and Technology, said Vietnam should reduce the pepper acreage and focus on suitable areas to raise productivity and quality.

Central Quang Tri province, Gia Lai province in the Central Highlands and Binh Phuoc province and Phu Quoc Island are appropriate localities for pepper, he said.

Regarding market expansion, Nguyen Thi Ngoc Suong, director of Song Hau Farm in the Mekong Delta province of Can Tho, said the Middle East was a big pepper consumer but Vietnamese companies have yet to tap the market.

Suong said buyers in Dubai of the United Arab Emirates have pledged to purchase 30,000 tonnes of pepper from Song Hau Farm a year.

"While local companies are seeking to get access to more overseas markets, Singapore traders are buying Vietnamese pepper for re-export to the Middle East for big profit," she said.

Meanwhile, Le Thi Giau, director of Tan Hung, stressed the U.S. as a potential market, saying her company had just delivered the first shipment of more than 30 tonnes of pepper to the U.S.

Vietnam is the world's biggest pepper producer with an annual output of 70,000 to 80,000 tonnes compared with the world's total of 300,000 tonnes. The country is also the largest pepper exporter as it supplies nearly half of the world's pepper demand.