Pepper prices hit three-year-low, quick recovery expected

Vietnamese pepper prices have fallen to the lowest level since June 2006 since exporters boosted shipments following a bumper crop, the Vietnam Pepper Association said.

Although shipments rose 46.8 percent to about 53,700 tons in the first five months, the price drop caused revenue to fall 4 percent to $124.5 million, compared to the same period last year.

Vietnam harvested about 100,000 tons of pepper in the 2008-09 season, which just ended - 5 percent more than the previous season.

Pepper from Vietnam is now $200- 500 per ton cheaper than from other large exporters. Indonesia, for instance, is quoting $2,500-2,550 a ton and Brazil $2,400 a ton, CommodityOnline reported Monday.

The pepper association, however, expected prices to recover soon as it forecast global pepper stocks would be low from now to the end of the year.

Meanwhile, pepper demand has remained strong despite the global economic downturn because the spice is so universal.

Vietnam, the world’s biggest pepper producer, now has only about 40,000 tons earmarked for export in the last seven months of the year.

The country’s pepper exports last year reached 89,700 tons, according to the Vietnam Pepper Association. Major markets for Vietnamese pepper include the United Arab Emirates, Germany, India, Egypt, Pakistan and Spain.

Source: Thanh Nien