This article will present the link between global trade policy and Vietnamese black pepper price. Changes in trade policy could affect Vietnam’s black pepper production and exports, and thus the price of this product.
1. Understanding The Impact Of Global Trade Policies On Vietnam Black Pepper Price
Global trade policies can have a significant impact on Vietnam’s black pepper exports. Here are some examples of how these policies could affect the black pepper industry in Vietnam:
1.1. Vietnam black pepper price affected by changes in tariffs and MRL
Vietnamese black pepper price have been significantly affected by the US 25% tariff on Vietnamese pepper imports. This has led to a 50% decrease in exports to the US in the first half of 2019.
Changes to the EU’s Maximum Residue Limit (MRL) have also affected Vietnamese pepper price. Only black pepper with residue levels below regulatory levels will be imported into the EU, resulting in increased production costs for Vietnamese farmers.
1.2. Free trade agreement affects Vietnamese black pepper price
The signing of free trade agreements between Vietnam and trading partners may affect Vietnamese black pepper price.
- These agreements can create new export opportunities for this product, increase competition in the global market and increase the value of the product. However, these agreements can also create challenges for Vietnamese black pepper production. For example, if Vietnam’s trading partners produce and export black pepper at a lower cost, the price of Vietnamese black pepper may be pushed down to compete with other products in the international market.
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- Trade sanctions, such as the imposition of sanctions, can also affect Vietnamese black pepper price. If Vietnam is imposed sanctions, the country’s export products will face difficulties in the international market and the value of these products will also decrease.
2. Analysis of changes in Vietnamese black pepper prices before changes in trade policy
The issue of Vietnamese black pepper prices has experienced many fluctuations in the past and is currently influenced by many different factors.
In 2021, Vietnamese black pepper prices spiked and peaked in more than 10 years due to the impact of the Covid-19 pandemic. According to the General Statistics Office, the price of Vietnamese black pepper in March 2021 has increased to 57,000 VND/kg, double that of the same period last year. In which, the price in Binh Phuoc, Dak Nong and Dak Lak provinces respectively reached 60,000 – 62,000 VND/kg, 5,000 – 7,000 VND/kg higher than the average.
The main reason for this price increase is the impact of the Covid-19 pandemic, which has caused many countries to cut down the production and export of black pepper, and also increase the demand for Vietnamese black pepper in the international market. In addition, the implementation of the program to build new rural areas and increase the pepper growing area is also one of the reasons for the increase in the Vietnamese black pepper price.
However, the price of black pepper in Vietnam has also fluctuated in recent times. According to 2015 statistics of Viet Agri Wholesale – the leading black pepper exporter in Vietnam: black pepper prices fell sharply when the US decided to end the GSP (Generalized System of Preferences) import tax incentive program for imports. some Vietnamese products, including black pepper. This has reduced Vietnam’s demand for black pepper in the international market and reduced product costs. According to the General Statistics Office, the price of black pepper in Vietnam in 2015 ranged from 90,000 to 110,000 VND/kg and dropped to 35,000 – 50,000 VND/kg by the end of the year.
3. The solution to stabilize Vietnamese black pepper
To keep the price of Vietnamese black pepper stable, there are several solutions that Vietnam can take:
- Improve product quality: Improving product quality can help increase the value of Vietnamese black pepper in the international market. The improvement of product quality also helps Vietnam compete with other black pepper products in the international market.
- Developing new markets: The development of new markets can help keep Vietnamese black pepper prices stable. The expansion of Vietnam’s export market could help boost global demand for black pepper and help increase its value.
- Promoting international cooperation: Promoting international cooperation can also help keep Vietnamese black pepper prices stable. Cooperation with other countries in the production and consumption of black pepper can help reduce production and transportation costs, thereby reducing production costs and keeping black pepper prices stable in the international market.
- Investing in research and development: Investment in research and development can also help keep Vietnamese black pepper prices stable. Finding solutions to save costs and improve product quality will help increase the value of Vietnamese black pepper products in the international market.
- Strengthen export management: Strengthening export management is also a solution to keep Vietnamese black pepper prices stable. Managing black pepper exports will help reduce illegal black pepper imports into Vietnam and ensure that exported black pepper products meet quality and food safety standards.