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Vietnam pepper monthly round-up January 2022

Price of real estate surges up, brings huge immediate profit for farmers.

However, this has strong impaction on agriculture, especially for pepper as the more farmers sell their estate, the less pepper source can be collected- thus it is predicted that future crop size will be lessened dramatically.

Inventory

At the beginning month of 2022, Pepper stock in Vietnam was almost empty.  While new crop only harvest in March, the available inventory will not adapt first quarter demand of worldwide market. The production is expected to continue to be at a disadvantage due to the impact of climate change and objective causes such as fluctuations in the real estate market, fertilizer prices and rising labour costs.

Export

As in latest report from Vietnam Pepper Association, in January 2022, Vietnam has exported nearly 16,020 tons. Compared to December, export volume increased around 5.6%.

Preliminary statistics of VPA show that in January 2022, Vietnam export volume includes 13,038 tons of black pepper and 2,887 tons of white pepper while others take up to 95 tons. Total export turnover reached nearly 75.2 million USD, black pepper reached 57.6 million USD, white pepper reached 17.3 million USD, the rest accounts for 0.3 million USD. Compared to the same period of 2021, export volume decreased by 4.7%.

In the latest update, the US continues to be the largest pepper import market of Vietnam, reaching 5,434 tons, accounting for 33.9% of total Vietnam export volume; followed by the Germany and India market, reaching nearly 1,000 tons each.

Logistics

Global supply chain not yet solve the situation of port congestion and container shortage. The increase in Logistics cost together with shortage on supplying source are now affecting heavily the the price of pepper in 2022.

Last but not least, as experts predict, the transportation fee will find no way to go back at their level like before pandemic and it will even take more than 3 years from now to see the slump in logistic fee.

Supply

The crop size of new pepper harvest seems gloomy. The Dak R’Lap area is unable to find any sources for pepper. The area from Mang Yang- Gia Lai, Chư sê and to the end km 92 of Dak Lak is also in a state of 50% pepper shortage in comparison to this time last year. The Cư Jút area also is around 40%. This is the survey number of Simexco through supplier channels.

Sustainable

It can be foreseen that this harvesting season year will not have sufficient source as last year. The shortage of labor along with high input costs leads to more burdens on farmers, profit after deducting investment costs is less favourable for them, not to mention that selling real estate can help them gain more immediate profit. These factors can lead farmers to cut off the pepper production area and thus will cause shortage on sources in the near future.

Meanwhile at this time, there is 5-10% of pepper poles already has red cherries. Some farmers apply selective picking while others consider the strip harvesting method (mix between ripe and not so ripe pepper being picked) to restore pepper trees as they want to have a higher yield for the upcoming year. The peak harvesting season will fall in the middle of March.

Other

Covid situation in Vietnam is raising, 2.275.727 cases in total till end of January 2022.

The total number of doses of vaccine injected was 181.280.001, of which the first dose was 79.059.864, the second dose was 74.137.789, and the third dose was 28.082.348.

The total number of deaths from COVID-19 in Vietnam so far is 37.777, accounting for 1.7% of the total number of infections.

Disclaimer

This publication has been prepared by Simexco Daklak Ltd., for information purposes only and are not intended (and should not be considered) to be legal advice on any subject matter. Simexco Daklak Ltd., does not give any representation or warranty, whether express or implied, as to the accuracy, completeness, currency or fitness for any purpose or use of any information in this publication or as to whether this publication reflects the current legislative or regulatory position or any other relevant developments. Simexco Daklak Ltd., assumes no responsibility to update this publicationbased on events after publication of the information contained therein.

Readers are responsible for assessing the relevance and accuracy of the content of the information in this publication. Simexco Daklak Ltd., will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information therein.

Information in this publication should not be considered as advice, or as a recommendation or solicitation to purchase or otherwise deal in securities, investments or any other products. Such information has been prepared for institutional clients, is not directed at retail customers and does not take into account particular investment objectives, risk appetites, financial situations or needs. Recipients of the document should make their own trading or investment decisions based upon their own financial objectives and financial resources.

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