Black pepper exports from Vietnam, the world's top producer of the spice, have been falling on thin demand in an oversupplied market, traders and an industry official said on Wednesday. "Pepper sales this year are not similar to last year when demand was high," said a trader at a foreign firm in Ho Chi Minh City. "It's hard to find a buyer."
On Monday, the government estimated pepper exports, mainly of the black variety, would fall 16.5 percent in the first half of this year from the same period of 2004 to 53,000 tonnes.
The value of first half exports would drop 14.5 percent to $74 million, it said. Do Ha Nam, chairman of the Vietnam Pepper Association, told Reuters 2005 exports could still reach the 85,000 tonnes he forecast in May, including 15,000 tonnes of white pepper, up from 10,000 tonnes in 2004.
"The remaining stocks in Vietnam are not much and given the lower price, farmers are not willing to sell," Nam said. Vietnam exported 110,000 tonnes of pepper in 2004, up from 74,400 tonnes in 2003, according to government statistics.
The Jakarta-based International Pepper Community of which Vietnam became a member in March said Vietnam exported 98,000 tonnes of the 105,000 tonnes it produced last year, up from 74,500 tonnes in 2003.
Nam said domestic prices of the black pepper had eased to 17,800 dong ($1.12) per kg from 19,000-20,000 dong this month.
Exporters quoted Vietnamese standard black pepper at $1,160 to $1,170 a tonne, free-on-board basis, up from $1,140-$1,150 last month, but still lower than $1,200 in January.
Traders said bids were around $1,150 a tonne. Vietnam's crop is estimated to produce 90,000 tonnes to 95,000 tonnes of pepper this year, down from 100,000 tonnes last year following the impact of a drought that ended in May. Domestic consumption is estimated at 5,000 tonnes. Given the estimated shipments in the first half, it would mean Vietnam still has at least 32,000 tonnes available for export.
However, industry experts said pepper grown in neighbouring Cambodia, a country seen as an emerging player on the spice market, often crosses into Vietnam quietly, making it hard to track real export figures.
Key buyers of Vietnamese pepper include the United States, India, Pakistan, the Netherlands, Germany and Singapore. European countries buy one third of Vietnam's pepper exports.