Hanoi (VNS/VNA) - Pepper prices this year areunlikely to recover after a strong reduction in 2019 due to abundant supply.

The demand for pepper-consuming countries has not yetshown signs of strong growth.

Vietnam this year expects to have bumper harvests from themany pepper plantations created in 2017.

The domestic market still has a significant stock of pepperfrom the previous crop, with many households and businesses stockpiling to waitfor higher prices, the Vietnam Pepper Association said.

On the world market, pepper output is likely to increase fromsome major producing countries. In India, the pepper output this year isexpected to reach about 61,000-62,000 tonnes, up by 30 percent year on year.

According to the association, Brazil has a production modelat very low cost and high yield. Those factors help Brazilian pepper’scompetitiveness on the global market.

With the sharp increase of pepper planting acreage in manycountries in the 2016-17 period, the global pepper market is forecast tomaintain supply until at least the end of 2020, the association said.

Therefore, domestic pepper experts believe this year pepperprices are likely to continue falling.

The pepper price is likely to continue to drop to about 36,000-38,000VND per kilo, and possibly 35,000 VND.

In the early days of January, the price was at 39,000-42,000 VNDper kilo.

However, the pepper price would not plunge furtherbecause with prices at around 37,000 VND, speculators will purchase pepper,according to the association.

The domestic pepper price is expected to remain at a lowlevel until the end of this year's crop, it said.

This price is forecast to increase slightly in 2021 and seestrong recovery from 2022 when the strong reduction in output at home andabroad will help revive the price on the local and global markets.

The lower future supply is due to farmers shifting to othercrops.

Last year was the third consecutive year Vietnam gained arecord in pepper export volume. But its pepper export value declined againstthe previous year due to the plunge in the global price.

In 2019, the average export price of pepper was 2,516 USD pertonne, a reduction of 23.6 percent year on year.

According to the Ministry of Agriculture and RuralDevelopment (MARD), Vietnam last year exported 284,000 tonnes of pepper, earning715 million USD. The exports rose by 23.4 percent in volume but fell by 5.7 percentin value year on year.

Of which, the US continued to be the largest export market ofVietnamese pepper, accounting for 19.5 percent of the total exports. Followingwere India, Germany and the Netherlands.

Pepper exports to most markets saw surges in volume butdecreases in value. However, Vietnam saw significant growth in pepper exportsto Germany in both volume and value.

The nation also gained high growth in pepper exports to somemarkets including Thailand, Russia and Turkey. The exports surged by 89.4percent in volume and 46 percent in value to Turkey, 40.6 percent in volume and10.3 percent in value to Russia, and 34.8 percent in volume and 0.6 percent invalue to Thailand.

This year, the free trade agreement between Vietnam and theEU (EVFTA) is expected to create good conditions and opportunities for thedomestic pepper industry to promote exports to the EU, especially the Germanmarket.

This agreement would also help pepper exporting enterprisesexpand their export markets and have more chances to attract foreign investmentin the processing stage./.