VIETNAM TRADE PROMOTION AGENCY EXPORT PROMOTION CENTRE ====== REPORT ON PEPPERCORN SECTOR IN VIETNAM (Báo cáo ngành hàng H t tiêu Vi t Nam) Đơn vị tư vấn: Đơn vị thực hiện: Trung tâm Đào tạo Nghiên cứu Khoa học Công ty Cổ phần Truyền thông Quốc tế IQ Tổ chức và Quản lý Địa chỉ: 88 Hàng Trống, Quận Hoàn Kiếm, Hà Nội Địa chỉ: 126/68 Phan Kế Bính Ba Đình Hà Nội Điện thoại: 04 8288406 Điện thoại: 04 7624464; 04 7624911 - Hanoi, 2007 -
1 TABLE OF CONTENTS I. Overview 3 1. Introduction to product group in the report 3 2. General information about the sector 3
II. Production situation 4 1. Distribution of production locations 4 2, Features, classification and product structure 5 3. Scale and production capacity 5 4. Source of production materials 7 5. Production trend 8 6. Major production units 8 7. Domestic and international well known brand names 8
III. Domestic consumption 10 1. Market features 10 2. Domestic consumption situation 10 3. Consumption trend 10 4. Price 10 5. Distribution channel 11
VI. Export 12 1. Export output and turnover 12 2. Export market 13 3. Major exporters 18 4. Export opportunities and strength 18
V. Import situation 21
VI. Orietation and Policies on developing the pepper export of Vietnam 22
VIII. Useful Addresses 23
2 I. Overview
1. Introduction to product group in the report This report involves pepper products made and exported from Vietnam, mainly black (IPC BP) and white (IPC WP) pepper materials which are then subdivided into two class: Class I (refined) and class II (preliminarily treated). 2. General information about the sector Pepper is one of six agricultural products of Vietnam with export turnover of over USD 100 million per annum capable of competing in international market. It is said that pepper is an industrial plant requiring lowest investment from state budget and smallest area for cultivation as compared with other long time industrial plants such as coffee, rubber, cashew and tea. Pepper brings high benefit from over VND 50 million/ha, or even VND 100 200 million/ha in some regions. Vietnam pepper is widely known in international market with two big brand names: Chu Se and Phu Quoc pepper. Vietnam pepper is exported into some major markets such as USA, German, Netherland, India, Singapore, Russian and Middle East.
3 II. Production situation
1. Distribution of production locations Vietnam pepper is mainly planted on cultivated soil, especially bazan, in Highland and Southeast Regions. Pepper growing areas are formed in these regions. Southeast Region, the biggest pepper growing area of the country accounts for 57% state area and 58.5% state output. Pepper is grown in Binh Phuoc, Ba Ria Vung Tau, Dong Nai, Binh Duong, and Tay Ninh on areas of 12,300 ha, 6,800ha, 7,580 ha, 1,300 ha and 640ha respectively. Highland ranks the second accounting for 30% total area and 34% total output. Pepper planting area will be expanded in Dak Nong to 5.600, Gia Lai to 5,500ha, Dak Lac to 3,500 ha, Lam Dong to 430 ha. Highland has potentials in soil, climate for pepper development in coming years. In North Central Coast Region, pepper is mainly planted on 2,150ha in Quang Tri, 280 ha in Quang Binh and 250 ha in Nghe An. In Central Coast, pepper is distributed on 180ha in Quang Ngai, 220ha in Binh Dinh, 270ha in Phu Yen, 2,300 ha in Binh Thuan and 100 ha in Quang Nam. Area Region (ha) Binh Phuoc 12,300 Dong Nai 7,586 Ba Ria Vung Tau 6,800 Dak Nong 5,600 Gia Lai 5,500 Dak Lak 3,500 Binh Thuan 2,300 Quang Tri 2,150 Binh Duong 1,300 Others 3,069 Total 50,105
(Source: General Statistics Office)
Pepper growing areas are concentrated with finished and semi finished processing and producing units.
4
2, Features, classification and product structure Like pepper of other exporters, Vietnam pepper is divided into two types: black and white, of which black pepper accounting for 90%. Black pepper has two types: Class I (IPC BP 1) and class II (IPC BP 2). Class I is treated through processes such as: Screening, classifying, cleaning and drying while Class II is preliminarily treated by screening and classifying. White pepper also has two types: class I and class II which are treated under processes similarly as those of black pepper as above. Features of pepper products: Black pepper White pepper Quality Class I Class II Class I (IPC BP Class II (IPC BP parameters (IPC (IPC WP 1) 2) WP 1) – 2) 1 Content (g/liter) 550 500 600 600 Max. Permitted 2 12 14 13 15 humidity (%) 3 Max. flat rate (%) 2 10 1 2 Max. Impurities 4 1 2 1 2 rate (%) Max. black 5 pepper mixing Inapplicable Inapplicable 1 2 rate (%) 6 Max. musty rate 1 3 1 3 Max corrupted 7 1 2 1 2 rate (%) (Source: IPC) 3. Scale and production capacity Area for pepper growing has been expended for 20 years, from 3,900 ha in 1986 to 52,000 ha in 2006, of which fat soil area for planting pepper in 2006 increases approximately 4% as compared with 2004, from 38,600 ha to 40,000 ha. Vietnam has contributed to increase global pepper output for last years. Vietnam pepper output increases promptly within 15 years backward, especially in 2005 2007 period. In the period 2001 2006, Vietnam pepper output increases greatly from 56,000 tons in 2001 to record level of over 100,000 tons in 2004 and to 92,000 tons in 2006. Pepper output in 2006 increases 3.7 times as compared with that in 1997, the world highest rate. Although Vietnam has to face with drought, pestilent insects, its pepper output remains at high level.
5 At present, Vietnam pepper output accounts for nearly 50% world output, exceeding conventional pepper exporters such as India and Indonesia. The key goal of Vietnam pepper sector is not the expension of growing area, but quality improvement and market maintaining. Pepper output in 2007 is seriously affected by long lasting drying and drought on large area. It was expected that in 2007, Vietnam pepper output fails to reach estimated level, but reduces to 85,000 90,000 tons, equivalent to 10 15%, as compared with that in 2006.
Vietnam and world pepper outputs in the period 1998-2007 Unit: ton Rate between Year Vietnam World Vietnam and world outputs 1998 22,000 206,284 10,7 % 1999 30,000 218,340 13,7 % 2000 36,000 259,186 13,9 % 2001 56,000 308,195 18,2 % 2002 75,000 341,060 22% 2003 85,000 362,160 23,5 % 2004 100,000 323,480 31% 2005 95,000 314,270 30,2 % 2006 105,000 282,900 37,1 % 2007(*) 95,000 278,000 34,2 % Note: (*) Estimated
(Source: Vietnam Pepper Association)
Pepper output in pepper garden in Vietnam has reduced due to drought and epidemics, but the reduction has not been high in comparison with other countries for last 2 years. It is predicted that pepper output and export value in Vietnam continue to reduce in 2007 and 2008. Pepper gardens are expected to be invested under the guidelines and support from State, Ministry of Agricultural and Rural Developemnt and Vietnam Pepper Association, therefore Vietnam pepper output will increase in next decade and maintain its first rank.
Development Orientation, Scale and capacity of Vietnam pepper sector in 2004-2020 period
Annual aver age increase rate % Items/ area planning 2004 2010 2020 2010/2004 2020/2010 2020/2004 Whole country:
6 Growing area (1000ha) 50,8 50,0 50,0 1,6 0 1,6 Area for products 35,5 45,8 50,0 4,8 0,9 2,5 Productivity (ton/ha) 2,01 2,17 2,56 1,3 1,8 1,7 Output (1000 tons) 80,1 100,0 130,0 4,1 3,0 3,9 North Central Coast Growing area (1000ha) 3,8 4,0 4,0 0,9 0 0,3 Area for products 2,3 3,5 4,0 5,8 1,4 4,6 Productivity (ton/ha) 1,17 1,45 1,75 4,0 2,1 3,1 Output (1000 tons) 2,7 5,0 7,0 14,2 4,0 3,7 Central Coast Growing area (1000ha) 1,2 3,0 3,0 25,0 0,0 0,9 Output (1000 tons) 0,6 2,3 3,0 47,0 3,0 31,3 Productivity (ton/ha) 0,95 1,52 2,00 16,0 3,2 2,1 Area for products 0,6 3,5 6,0 80,5 7,1 6,2 Highland Growing area (1000ha) 13,1 15,0 20,0 2,4 2,1 3,3 Output (1000 tons) 10,1 13,0 18,0 4,8 2,4 4,9 Productivity (ton/ha) 1,95 2,30 2,60 3,0 1,3 2,1 Area for products 19,7 30,0 47,0 8,7 5,6 8,6 Southeast Growing area (1000ha) 32,7 30,0 25,0 1,4 1,8 1,5 Output (1000 tons) 22,8 27,0 25,0 3,1 0,7 0,6 Productivity (ton/ha) 2,15 2,30 2,80 1,2 21,0 1,8 Area for products 49,1 62,1 70,0 4,4 1,3 2,6 (Source: Vietnam Pepper Association)
4. Source of production materials
Materials for pepper production are gathered in Highland and Southeast. Pepper races in these regions are:
7 • Vinh Linh, Se, Trung, India and Lada Belangtoeng races are gorwn in Southeast Region; • Phu Quoc, Ha Tien races grown in Phu Quoc; Vinh Linh, Se Mo, Se Loc Ninh, Trung, Trau, Tien Son, Lada Belangtoeng and India pepper races grown in Highland provinces; • Vinh Linh, Cua pepper races grown in Quang Tri; • Vinh Linh, Se Mo, Se Loc Ninh and Trung pepper races with high productivity of 3 tons/ha. Vinh Linh and India races have high quality in term of natural weight from at least 520g/l. Pepper growing structure is diversified. In Tay Nguyen and Phu Quoc, pepper is mainly grown around wooden pillars (accounting for 90%) whereas pepper is grown around alive plants (95%), concrete and brick pillars in Southeast Region and Quang Tri. In order to prevent forest destruction, households in Highland provinces and Binh Phuoc are encouraged to plant pepper around alive plant. There is not much differential between pepper outputs around alive plants and wooden pillars. 5. Production trend
+ Improve product quality: some methods are applied to improve old garden, replace low effective breedings with high productivity and quality races. + Concentrate on improvement of existing pepper growing units rather on expension of production scale and growing area. + Enhance production methods by applying high technology on production and limit the process of preliminary treated pepper. 6. Major production units Major pepper procution units of Vietnam concentrate in key pepper growing areas. There are 11 factories to process pepper constructed in Binh Phuoc,Binh Duong, Dong Nai, Ho Chi Minh city, Long An, Quang Tri with processing power up to 50,000 60,000 tons/year, of which 7 are equipped with processing and steam pasteurizing system to improve quality and sanitation. Thanh Ha, Pitco, Phuong Hoang, To Ngoc Thanh, Duy Tan, Vinh Hiep, and Haprosimex Ho Chi Minh enterprises have invested in impurity separating chain to separate sticks, rocks, etc. Other enterprises such as Intimex, Truong Loc, Fonexim, Vinaharris, Tan Hung and Maseco enterprises have invested in steam processing chain. Ned Spice Company is equipped with modern steam processing and pasteurizing chain to ensure TPC sanitation standard. As a result, export pepper quality is improved, and Vietnam pepper has pernentrated into fastidious markets such as USA, European markets, etc and Japan, Korea markets in future. 7. Domestic and international well-known brand names Chu Se pepper is domestically and internationally well known as it ensures sanitation standards and has special taste. Chu Se pepper is grown in under 5
8 year gardens, which is potential supply in the future. There will be over 3,000 ha of pepper grown on fat soil with productivity of 6 tons/ha (average productivities of India, Indonesia, Srilanca are 2 tons/ha). Vietnam Pepper Association is paying attention to promote the brand name “Chu Se pepper”. People’s Committee of Chu Se and Vietnam Pepper Association has successfully implemented the slogan “cooperation between 4 parties” to transfer white pepper processing technology to households. Chu Se brand name will be first Vietnam brand name promoted. This will create competitiveness in international integration, stable development for Chu Se pepper in particular and Vietnam pepper in general, will bring benefits to households and enterprises and contribute to national economic development. Apart from Chu Se, Vietnam is also famous for Phu Quoc pepper. Pepper is traditionally grown in Phu Quoc Island, and it is considered as a key agricultural plant in the island. The requirements to develop ecotourism and high price of pepper are factors contribute to the stable development of Phu Quoc pepper.
9 III. Domestic consumption
1. Market features
In spite of its large market with over 85 million people, Vietnam is a narrow market for domestic consumption. Pepper is mostly used by men of at least 18 years old.
2. Domestic consumption situation
As the biggest pepper exporter, Vietnam rarely imports pepper. Pepper sonsumption in Vietnam is monotonous as there is little demand in pepper. In 2007, pepper output reaches 85,000 90,000 tons, of which 95% pepper is exported into foreign markets. The remain is for domestic market 3. Consumption trend There is no change in pepper consumption trend in Vietnam. The majority of the population uses black pepper with increasing amount at Tet vacation. 4. Price Pepper price at 2006 end and the beginning of 2007 increases quickly due to following reasons: • First, failure of crop at higher level than that expected by Vietnam Pepper Association. • Second, the withholding of households, suppliers for higher price and more benefits, • Third, India finished the harvest at early 2007, but the output was not enough for domestic use whereas Indonesia and Malaysia, Braxin were preparing for harvest in July, and in October respectively. As a result, world pepper market depends on Vietnam pepper without any competition. Pepper amount sold at three first months of 2007 reduced 40% as compared with that at the same time in 2006, but export price increases two times.
10 Reference to Vietnam black pepper price in the first 8 months 2007
7000
6000
5000
4000 2006
USD 2007 3000
2000
1000
0 1 2 3 4 5 6 7 8 9101112 Months
(Source: IPC)
5. Distribution channel Pepper is sold through distribution channels directly at supermarket, retail shops. Wholesale agents are companies at given pepper peoduction areas, namedly South Agricultural Products Corporation, North Agricultural Product Corporation, etc.
11 VI. Export
1. Export output and turnover Export output of Vietnam pepper increase 10 times within 16 years, from 9,000 tons in 1990 to 106,000 tons in 2006. This factor helps Vietnam to become the biggest pepper exporter in the world. Prior to 1995, growing area was limited with 7,000 ha in 1995 and 9,300 tons ouput and 17,900 tons for export. After 1995, the pepper price gained its record, and this even contributed to encourage producers to expand growing area. Then the outpput increased uncontrollably. Period 2001 2006 experienced gigantic growth in both amount and export value of Vietnam pepper. Since 2002, Vietnam has maintained ist first rank of pepper export. 98,494 tons of pepper, valued 133,725, 000 USD was exported from Vietnam, increasing 32% as compared with 74,605 tons, valued 105,213, 000 USD in 2003. In 2005, another 96,179 tons, valued 138,143,000 USD was exported and Vietnam kept its first position in 2006 with 106,000 tons, increasing 13% as compared with the presvious year. In 2006, 116,670 tons, accounting for 50% total supply are supplied into world market, (increasing 21% as compared with that in 2005). There is reduction in pepper export due to drought and drying in 2007, which influenced seriously on pepper growth. Vietnam pepper export Nam
Export Area (1000 Output (1000 Export turnover Year amount (1000 ha) tons) (million USD) tons)
2000 27.9 39.2 36.4 145.9 2001 31.6 44.4 56.5 90.5 2002 47.9 46.8 78.4 109.3 2003 50.5 68.5 73.9 105.9 2004 50.8 73.4 110.5 133.7 2005 49.1 77 109 120 2006 50.1 99.9 120 200
(Source: 2000 – 2005 General Statistics Office, 2006 Provincial reports on Production- Export by Ministry of Trade) From year beginning to October 2007, domesric enterprises exported 68,500 tons pepper with turnover USD 221 million. Export output reduced 38%, but
12 turnover increased 27% as compared with the same time of the previous year as export pepper price increased 100% from 1,540 USD/ton to 3,670 USD/ton. The export price increases leading to the increase of domestic price at VND 46,000 48,000. During 11 first months of 2007, Vietnam has exported 76,000 tons, gain USD 249 million. Only in November, the export amount and value increases 100% and 261.9% respectively in comparison with that at the same period in 2006. It is expected to reach USD 200 million or USD 210 million, increasing 5.3% as compared with that in the previous year. However, pepper reached its estimate in early October and became one of three sectors with fastest growth rate (37%). It is expected to increase pepper export turnover as two times as that in 2006, reaching 310 million in spite of the readuction in output. International trend is facilitating Vietnam pepper sector. The density of white pepper for export is increasing. 500 tons white pepper, acoounting for under 1% total export amount, was exported first time in 2002. recently, white pepper export density quickly speeded up from 9,443 tons in 2004 (accounting for 10% total export value) to 9,946 tons in 2005 (11%) and 18,390 tons (17%) in 2006. Demand for white pepper and its price are bigger and higher than those of black one, but the density for white pepper is rather low. Black and white pepper export of Vietnam (2002-2006)
Crite 2002 2003 2004 2005 2006 ria Black Whi t Blac Whit Blacl Whit Blac Whit Blac Whit peppe e k e pepp e k e k e r pep pepp pepp er pepp pepp pepp pepp pep per er er er er er er per Amo 77,50 71,0 3,52 89,0 9,44 86,2 9,94 87,6 18,3 unt 500 0 76 9 51 3 33 6 10 90 (Ton) % 99,4 0,6 95 5 90 10 89 11 83 17 (Source: Vietnam Pepper Association) Vietnam is making efforts to improve quality of pepper for export and incease output. The Association (VPA) is encouraging its members to satisfy market requirements by further investment in processing equipments. 2. Export market
At present, Vietnam’s peppercorn occurs in more than 80 countries in the world. Export production occupies approximant 50% of global peppercorn export that confirms the top position of Vietnam.
13 The US is the biggest peppercorn exporter from Vietnam, nearly 20% of total export of Vietnam, next is German, Holland, India, Singapore, Russia and Middle East. Despite penetrating into America after coffee, export turnover of Vietnam’s peppercorn for this market has been accelerating. In 1997, Vietnam’s peppercorn value exported to the US was 2.1 million USD; in 2002 it reached 16.192 million USD equal to 7.7 times of the year 1997; in 2005 it was 29.582 million USD equal to 1.8 times of the year 2005; in 2006 it was 33.552 million tons equal 1.13 times of the year 2005. Such boom is caused by directly importing peppercorn from Vietnam increasingly and decreasing the import through the intermediates of American businessmen. From 2001 to 2005, the peppercorn quantum from Indian to America reduced much, whereas the import from Vietnam accelerated although our export quantum to the US is lower in 2006 than in 2005 (in 2006 we exported 19.429 tons, decrease by 10% comparative with the quantum of 21.186 tons in 2005) but the export value increase because the peppercorn price went up in the final moths. In conclusion, in short term, the peppercorn import from Vietnam occupies about 30% of total demand of consumption of the US. Pepper export from Vietnam and India to the US in the period of 2000-Unit: Ton
Year 2000 2001 2002 2003 2004 2005 2006 Vietnam 11.00 11.43 13.89 21.18 19.429 1.763 3.160 0 4 2 6 India 11.03 3.904 8.121 7.591 5.105 2.196 3.828 5
(Source: International Trade Centre - ITC) Pepper export from Vietnam to German increase very much in the period of 2001 2006. In 2001, the output of pepper export to German achieved 1.617 tons worth 2.528 million USD; in 2006 it increased to 10.957 tons worth 19.021 million USD, equal to 6.8 times of the output and 7.4 times of value of the year of 2001. If up to 2001, German is the tenth pepper importer of Vietnam, recently the pepper output and turnover exported from Vietnam to German has been increasing. Only in September, 2007, the pepper output exported to German attained 862 tons costing nearly 3.648 thousand USD, decreasing by 28.55% of quantity and by 18.75% of value comparative with August 2007, and reducing by 28.79% of quantity but increasing 17.11% of value in comparison with September 2006. Total of pepper output exported to German in nine first months of 2007 achieved 7.327 tons worth 24 million USD, decreasing by 18.23% of quantity but increasing by 54.81% of value in comparison with nine first months of 2006. In general European market, in 2006, the pepper output imported from Vietnam was 44.498 tons worth 75.773 thousand USD, equal to 1.1 times of output in 2005 with 40.651 tons. In Europe, Holland is the top pepper importer of Vietnam. Since 2001, the pepper output exported into this market has taken a high density of export portfolio of Vietnam with 5.108 tons costing 8164 million USD. Up to
14 2006, this country imported 8.932 tons of pepper with the value of 14.898 million USD from Vietnam, which increases by 43.8% in comparison with 2001. Besides Holland, exporting the pepper to Geram rises strongly within period of 2001 2006. In 2001, Vietnam exported only 1.617 tons pepper worth 19.021 million USD. By 2001, German ranks the tenth as the pepper exporter of Vitenam after Singapore, United Arab Emirates, Holland, China, India, Egypt, Pakistan, and Indonesia. Up to 2006, German becomes the second largest pepper exporter. In last time, the quantity and turnover of pepper exported from Vietnam to German has been increasing with record speed, promising a potential export market of the Vietnamese pepper. In term of African market, the quantity of pepper export of Vietnam to this market is fairly high. In 2006, total import of this market gianed approximantly 10.970 tons worth 15.692 thousand USD, was 1.5 times quatity and 1.4 times value higher than that of the year 2005 (the output of pepper import of this market from Vietnam in 2005 was 7.434 tons costing 11.453 thousand USD. The situation of the pepper export from Vietnam to the Asian market tends to go down. In 2006, the import output to this market is 19.429 tons, reducing by 1.757 tons in comparison with the year 2005, in which the output is 21.0186 tons. Despite the decrease in import output to this market in comparison with 2005, import value increases. In 2006, the output is 33.552 thousand USD, increasing by 1.928 thousand USD. Although Vietnam is the top exporter in the world but Vietnam still has to export through the intermidiates, after that re export with high price. And India is one of the Asian largest importer and re exporter later. The re export products of total export of India are increasing. If in 2000 the total pepper import for re exporting of India is 6.570 tons of 19.900 tons total export, in 2004 it is 14.200 tons of 14049 total exports. The amount of pepper imported from Vietnam by India doubles in period of 2001 2006. In 2001, Vietnam exported 4.228 tons pepper worth 6.451 million USD to India, and in 2006 it increase to 7.843 tons worth 11.066 million USD. The Indian companies import pepper from Vietnam, then re export and earn fairly high profits. Besides Indian, in Asia, Vietnam exports much pepper to China. In 2006, the pepper output exported from Vietnam to China is 321 tons with value of 528 thousand USD, increasing 1.625 times of output and twice of value higher than the year 2005 (the output of 2005 is 79 tons worth 77 thousand USD). Besides China, Japan also imports much pepper from Vietnam. In 2006, the output imported by this market is 769 tons worth 1.320 thousand USD equal 1.652 times of ouput and tiwce of value of the year 2005 (the import output of 2005 is 473 tons with value of 659 thousand USD). In ASEAN countries, Singapore is always the number one market of Vietnam beacause this countries has maintained the free trade for many years so 96% of imports into Singapore market are not imposed tax. In the previous years, Sigapore was one of the bigggest pepper importer of Vietnam; howerver, the quantity of pepper export toi this market has reduced strongly for the last years. In 2001, the output of pepper export is 12.266 tons with value of 189.832 million USD; but in 2005 it reduces by 10.277, only gained 2.039 tons worth 3.455 million USD. Moving to 2006, Vietnam’s export amount to this market goes up in comparison with the year 2005. The pepper output exported to Sigapore by
15 Vietnam shot up in July 2007 with 619 tons and turnover of 1.4 million USD which increases by 270% of quantity, 272% of value in comparison with January 2007, reduces by 3.6% of quantity but rising by 70% of value in comparison with February 2006. These make the export pepper quantity of two first moths achieve 786 tons with turnover of 1.8 million USD, redueing by 5.1% of quatity but rising by 68% of value in comparison with the same period of last year.
Pepper export markets of Vietnam on period of 2003-2006, Unit: 1.000 USD, ton
2003 2004 2005 2006 N Nation Qua Qua Qua Quant o. Value Value Value Value ntity ntity ntity ity 17.37 11.4 18.92 13.8 31.62 21.1 33.55 19.42 America 9 34 5 92 4 86 2 9 15.91 10.5 17.25 12.6 29.58 20.0 29.93 18.12 1 The USA 6 05 4 79 2 58 8 2 2 Canada 1.068 649 1.150 813 1.453 931 1.671 850 3 Argentina 0 0 16 14 189 98 1.671 255 4 Other 395 280 505 386 400 100 272 202 38.00 25.9 49.44 35.8 57.28 40.6 75.77 44.49 Europe 5 66 8 44 6 51 3 8 4.91 6.26 6.80 19.02 10.95 5 Germany 7.073 8.370 9.331 0 6 3 1 7 5.26 11.10 7.57 11.31 7.15 14.89 6 Holland 8.893 8.932 0 1 8 0 6 8 3.18 4.17 5.22 7 Russia 4.102 5.530 7.179 6.854 4.772 5 0 9 1.98 2.93 3.20 8 Poland 2.771 4.195 4.454 5.634 3.872 1 1 1 1.20 2.28 3.20 9 Portugal 1.920 3.262 4.073 5.402 3.422 1 4 1 2.39 2.62 2.36 10 Turkey 3.085 3.530 3.071 3.601 2.450 0 5 7 1.36 2.00 2.78 11 Ukcraine 1.624 2.590 3.555 3.144 2.267 0 9 8 2.02 1.25 2.16 12 France 2.944 1.734 2.945 3.044 2.159 4 6 9 1.26 1.50 13 Britain 530 295 1.695 2.485 3.394 2.007 9 7 1.08 1.98 1.70 14 Italia 1.499 2.782 2.465 2.882 1.681 6 9 7 1.22 1.01 15 Greece 681 525 1.563 1.366 2.345 1.223 3 9 16 Belgium 411 233 615 409 1.198 825 1.715 829 17 Sweden 86 50 92 57 618 365 1.126 556 18 Israel 391 277 1.001 744 1.104 720 954 463
16 19 Rumania 515 399 215 172 725 546 570 313 20 Slovakia 36 27 174 117 178 140 462 247 21 Denmark 68 52 278 216 304 317 280 213 22 Bungaria 389 284 348 262 352 268 274 142 23 Others 987 597 373 267 576 322 173 124 41.27 30.2 54.86 40.8 37.78 26.9 58.54 31.10 Asia 7 17 4 45 1 08 9 3 11.87 8.75 11.39 8.63 11.05 7.51 13.57 24 Arab 8,934 0 4 6 0 1 1 8 5.30 12.48 8.99 7.52 11.06 25 India 6.633 9.434 7,843 5 5 0 0 6 3.44 11.88 8.89 2.69 26 Pakistan 4.545 3.745 9.297 6,509 4 8 9 2 5.68 5.12 2.03 27 Singapore 8.034 6.597 3.455 9.637 6,032 7 4 9 1.70 1.70 28 Malaysia 709 418 2.408 2.656 4.530 2,391 0 5 1.09 29 Korea 1.203 824 1.289 989 1.523 2.668 1,366 7 Philippinn 1.10 1.73 1.48 30 1.398 2.221 1.915 1.238 1,052 es 8 4 1 Banglades 31 442 336 418 335 567 459 1.172 699 h 32 Japan 324 232 757 584 659 473 1.310 769 33 Australia 1.202 627 1.317 815 983 518 1.178 652 34 Indonesia 779 568 1.202 960 591 424 513 377 35 Kazastan 209 144 152 120 408 308 486 393 36 China 712 510 166 136 77 79 528 321 37 Jordan 262 201 450 340 405 328 211 135 38 Kuwait 109 85 96 70 126 118 166 102 1.97 1.41 39 Others 2.846 2.022 186 155 971 650 4 9 6.41 10.48 7.82 11.45 7.43 15.92 10.97 Africa 8.552 8 8 3 3 4 6 0 3.99 4.85 4.37 40 Egypt 5.182 6.340 6.751 7.119 4,991 8 2 6 1.01 41 Angeria 1.314 1.180 924 1.217 846 2.276 1,676 0 South 42 225 153 613 435 986 507 2.133 1,061 Africa 43 Yemen 149 175 112 150 803 521 1.086 874 44 Senegal 475 340 176 153 548 420 1.197 856 45 Sudan 422 296 354 281 603 435 1.081 698 47 Others 785 646 1.713 1.11 545 339 1.034 814
17 8 105.2 74.6 133.7 98.4 138.1 96.1 183.8 106.0 Total 13 05 25 94 43 79 00 00 (Source: Vietnam Customs) Pepper export density of Vietnam to some important markets in the world Unit: %
Main 2003 2004 2005 2006 market Valu Quantit Valu Quantit Valu Quantit Valu Quantit e y e y e y e y Total 100 100 100 100 100 100 100 100 America 16.5 15.4 14.2 14.1 22.9 22.0 18.3 18.3 Europe 36.1 35.1 37.0 36.4 41.5 42.3 41.2 42.0 Asia 39.2 40.8 41.0 41.5 27.3 28.0 31.9 29.3 Africa 8.1 8.7 7.8 7.9 8.3 7.7 8.7 10.3 Pepper export density to a few other countries (%) USA 15.1 14.2 12.9 12.9 21.4 20.9 16.3 17.1 Holland 8.5 7.1 8.3 7.7 8.2 7.4 8.1 8.4 Germany 6.7 6.6 6.3 6.4 6.8 7.1 10.3 10.3 India 6.3 7.2 9.3 9.1 6.8 7.8 6.0 7.4 Singapor e 7.6 7.7 4.9 5.2 2.5 2.1 5.2 5.7
(Source: Head Department of Customs of Vietnam)
3. Major exporters Number of Vietnam’s pepper export enterprises increasing from 20 in 2002 to 100 in 2006, mainly in Sourthern, in which 78 enterprises export directly, 26 ones are the members of Export Association, occupying 81% of shares. Some main export enterprises: • Tan Hung company (HCMC) • Intimex company and Hau River Farm (Can Tho) • Binh Dinh Service Export Import Investment Genegal Corporation (PISICO) • Import export and Investment Joint stock Company of Ho Chi Minh city (IMEXCO) • Intimex Export Import Company 4. Export opportunities and strength
The strong points of pepper export of Vietnam: • Natural conditions: favourable nature, land, climate suitable with growth and development of pepper tree. • Profuse human source: the agricultural workforce of Vietnam is big, the farmer work very hard with lots of experiences in cultivating the tree
18 requiring technique like the pepper tree, and able to approach the advanced prodcution and process technology.. • Investment cost of pepper garden does not cost much: in comarison with other industrial crops like coffee, cashew, rubber trees..., the pepper tree requires the low investment expense. • Big supply source and equal dustribution in year: at present Vietnam occupying about 50% of the market supply source. The international pepper businessmen admit that a small fluctuation of Vietnam’s pepper sector also affects the international pepper market. • High productivity: in comparison with the pepper production countries, the pepper productivity of Vietnam is fairly high because its pepper garden is have young age, from 10 15 years – at time the pepper trees achieve the highest productivity. • Stable quatity and quality: Vietnam’s pepper sector has a big strength brought by the stable quatity and quality. From 2002 up to now, when the pepper price in market goes down together with the decrease in output of many countries, Vietnam has still maintaned the productivity at high level. In addition, Vietnam pepper has flavour (aromatic, peppery) and chemical, physical charecteristics which are not inferior the pepper of Indonesia and India, so it has good competition. Therefore, the importers feel secure about Vietnam’s pepper. Pepper export opportunities of Vietnam: • Demand of pepper consumption in the world increases more and more: In developed countries, over 60% of pepper is used in food service, 40% of the rest is used in household and sector of medicine, perfume, chemistry comestic. In developing countries, 90% of pepper output is used by households. This proves that the international pepper market is very large. • Having the position in the international market: Now Vietnam’s pepper output ranks at the top in the world and it can rule the international pepper market. The international pepper producers assess that Vietnam is the main pepper supplier for the world. • Opportunities of international coorperation: Some pepper producers such as Indonesia, Malaysia... established the development cooperation with Vietnam in order to ensure the price profitable for the farmers and the pepper export enterprises. At the fouth ASEAN Technology, Science and Economic Cooperation held in Jakarta in April 2007, the chairman of Vietnam Pepper Association signed the memorandum of understanding with the chairman of Indonesia Pepper Exporters Association about founding the cooperation committee of research and implentation of policies in order to step up the marketing activities and the pepper quality and supply source as well. • Opportunities of creating the high value added: Many products can be made from pepper materials, so lots of opportunities are made to raise the value added of this article.
19 • The supply source in the world decreases: Vietnam’s pepper will influence much the global pepper price because the sources of the big producers like India, Brasil, and Indonesia is decreasing gradually with the output less than 1 ton per hecta, whereas Vietnam’s pepper output remains 2.5 tons per hecta. Therefore, the pepper production and export of Vietnam have big advantages • The pepper price in the work market continues increasing: the high price resulted from the increasingly narrowed supply source during the last year will last for a time. • Advantageous business environment: Vietnam has become the full member of International Pepper Association (IPC) since 21 March 2005. This is the large chance for Vietnamese enterprises to contact and find the pepper exporting partners in the world market. The event that Vietnam joined in World Trade Oganization on 11 July 2007 helps it attain the equal position like other members on forming global trade policies, have chance to struggle for establishing a new, fairer, more reasonable economic order, have chance to protect the benefits of our country and enterprises as well.
20 V. Import situation
Because our pepper output makes up 50 60% of the international pepper output and we ranks at the top of pepper producers in the world, Vietnam has no demand of importing pepper from abroad. Vietnam’s pepper production mainly serves the demand of teh world (occupying 95%) and the rest is servered the domestic demand.
21 VI. Orietation and Policies on developing the pepper export of Vietnam
Aiming at keeping the first export position in the world peepr market, Vietnam is actively speeding up the implementation of “cooperation between 4 parties” (Goverment, Entrepreneur, Farmer, and Scientist) in order to invest and transfer technology of pepper proccessing to thefarmer, enhancing the productivity and quality for products with competitive price. To this end, Vietnam passed a few development policies as followings: Seize an opportunity: At present, the export output of the main export countries goes down strongly, the pepper price booms. Therefore, process producers and export businessmen of Vietnam need to coordinate closely to creat the stability for price and seize the opportunities to push the sale at the time the pepper is scarce in the market. Actively “master” the price: Vietnam completely has capacity of ruling the market over the price and export policy as the role of the biggest exporter in the world (holding 50% of the world output). To grasp the market, the producers need to make the best of chance and crop law (Vietnam pepper is harvested two months later than the world, at the sale date of the scarce market). Therefore, Vietnam not only brings onto the market when the export price is under 2.300USD/ton. Especially, the production time should be limited to the minimum in September and Octorber in order to advoid the virtual increase in price at the beginning of the year because it only make damage for both farmers and producers. Changing the production mode: • It is necessary to change the thought and purchase of the importers quickly. Now and in future, demand of teh worl requires many kinds of products with various qualities while Vietnam completely provides the processed pepper with high quality to sastisfy the demand of market. • The enterprises should not invest into building more factories because there is no factory’s operation over 50% of capacity at present. The problem is changing the output with raw products by proceessed ones. This requires the exporters to promote the marketing strategy for Vietnam’s pepper products. . • Enhancing the populalization of trademark, the pepper will get more effective through the means of communiactaions and other special publications. Taking part in trade festivals does not bring efficiency to the pepper sector in general; it only benefits some importers because most of the processed products are under their trademarks.
22 VIII. Useful Addresses Vietnam Pepper Association 135 Pasteur, District 3, Ho Chi Minh City Vietnam Tel: 84 8 084737 Fax: 84 8 8224776 Phu Quoc Pepper Association Phu Quoc island district, Kien Giang, Vietnam. Ministry of Agriculture and Rural Development http://www.mard.gov.vn
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