HO CHI MINH: Farmers and businesses involved in the pepper and cashew nuts industry in southern Vietnam are hard hit with falling prices as demand for the two items dropped due to the Covid-19 pandemic.
Currently, the price of pepper in the Central Highlands and southern Vietnam is between VND34,500 to 37,500 (RM6.37 – 6.92) per kilo, the lowest in the past few years.
The Baria–Vungtau province’s pepper is among the highest priced in the region, but its price has dropped by VND2,000 (37 sen) per kilo compared to last week, according to the Vietnam News agency.
February also saw a five per cent drop of pepper price in Vietnam compared to January.
Hoang Phuoc Binh, deputy chairman of the Chuse District Pepper Association in Gia Lai province, said that while the farming areas and output of pepper in Vietnam and other countries have risen greatly over the years, demand for pepper has only increased by only 2–2.5 per cent each year.
The current supply of pepper is large since farmers have just finished their harvest. But the Covid-19 pandemic is pushing the global market demand lower, so prices are also dropping.
Farmers are losing VND15,000 (RM2.77) per kilo as they have had to sell at a low price to have enough money for workers’ salaries and equipment.
Pepper export turnover in the first three months of the year was US$156 million (RM679 million), 18 per cent lower year on year.
Meanwhile, the price of cashew nuts in southern provinces is VND18,000–19,000 (RM3.32-3.50) per kilo, which is about VND10,000 (RM1.84) lower than the beginning of the year.
Unfavourable weather has also dragged down the quality of the cashew nuts.
Some farmers are now chopping down their cashew crop to switch to growing something else, while cashew processing businesses are also struggling with limited global demand.
Vietnam Cashew Association chairman Pham Van Cong said that exports and the price of cashew will drop greatly within the year, and that the industry’s 2020 goal of US$4 billion (RM17.4 billion) in export turnover will have to be re-evaluated.
Cashew factories have been urged to slow down their production, keep up to date with the market, and pay more attention to product quality.
The association, however, noted that demand would not be dramatically low since cashews are considered a nutritious food, and that businesses should not be too pessimistic.
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