VietNamNet Bridge – Domestic pepper growers are advised against stockpiling products while waiting for prices to rise, warned Do Ha Nam, chairman of the Viet Nam Pepper Association (VPA).

Storing products to help stabilise prices was sometimes necessary, he said. However, the association suggested that farmers not store products even when prices were about to rise so as not to compromise an open market or strong partnerships, Nam said.

VPA made this recommendation as pepper growers hold on to their products despite recent high prices and even though 40% of this year's pepper yield has been already harvested.

Domestic pepper exporters are facing difficulties because they cannot purchase sufficient product. Pepper exported in the first three months of the year was mostly harvested in 2007.

Countries importing pepper from Vietnam were troubled by decreased exports, VPA said.

According to some farmers and traders, the imbalance between supply and demand on the international market was a primary reason for the decrease. It is estimated that pepper demand on the international market will continuously increase in the near future.

This year, Vietnam is at an advantage as world coffee supplies will not meet demand, leading to high prices.

Since the beginning of this year, pepper prices have stayed high, at around VND59,000 per kilo. Chu Se pepper, in particular, costs VND65,000 (US$4) per kilo. Exporting costs around $4,000 per tonne, an increase of $400 per tonne over last year.

As prices rise, pepper growers stand to earn VND120-150mil ($9,300) per hectare. Some farmers hope to earn VND5bil ($312,000) this year.

Pepper growers have also profited well from previous crops. This year, farmers are no longer under bank loan pressure as they have been in the past.

Many growers have made considerable profits by storing pepper last year, but this has seriously affected other growers.

(Source: Viet Nam News)