Pepper prices' volatility in one month. Source: tintaynguyen.com. Graphics: Ly Ly Cao.

HÀ NỘI — Việt Nam pepper prices rose to a one-year high on Wednesday, driven by Chinese consumption recovery and higher demands from local businesses. 

Farmers in the Central Highlands and the south of Việt Nam sold pepper at VNĐ48,000 – 50,000 (US$2.08-2.17) per kilo on Wednesday, depending on the location, a 26.6 – 31.1 per cent increase from last month, according to tintaynguyen.com.

The price in Bà Rịa – Vũng Tàu Province reached VNĐ50,000, the highest since January 2019.

Domestic pepper prices have surged in the last few weeks because the Chinese market has recovered from the deadly COVID-19 pandemic, and local companies have stepped up buying to fulfil their contracts.

“Recently, pepper prices have increased. There are several reasons for this improvement. Firstly, COVID-19 in China is basically over, so demands from Chinese customers are higher,” said Nguyễn Nam Hải, President of the Vietnam Pepper Association (VPA).

“Secondly, many local businesses sold their stock before the contracts were due, so now they are rushing to buy pepper from farmers to meet demands from their customers.”

With the surging prices, farmers have stopped selling their stock, pushing prices even higher, he added.

However in the long term, the pepper prices are unlikely to see a spike like this because of a global supply glut.

“In general, since 2014, Việt Nam and many countries such as Brazil and Cambodia have expanded production areas," Hải said.

“While global annual production growth is around 8 per cent, consumption growth is just around two per cent. So in the long term, pepper prices are unlikely to increase like they used to.”

According to the Ministry of Industry and Trade, Việt Nam has about 100,000 hectares of pepper area with capacity of 247,000 tonnes.  

Coffee in the Central Highlands, Việt Nam’s largest coffee-growing area, also witnessed growth of around 8 per cent compared to last month to VNĐ31,600 – 32,000 per kilo on Wednesday. — VNS