Farmers are harvesting pepper in Gia Lai Province.(Photo: gialaitv.vn)

Hanoi (VNA) - The Vietnam Pepper Association’s proposal for a pepper futures trading centre was welcomed by farmers who hoped that such trading would give them an upper hand while deciding prices.

The association said that the proposal had been already submitted to the Ministry of Agriculture and Rural Development.

Do Ha Nam, chairman of the pepper association, said that starting pepper futures trading was necessary for Vietnam and would help extend its reach in the global pepper business as the world’s biggest pepper producer. Vietnam currently accounted for 50 percent of the global total pepper output.

Hoang Phuoc Binh, Deputy Chairman of Chu Se Pepper Association in Gia Lai Province, said that the international pepper community forecast that Vietnam would continue to take the lead in pepper exports in the next eight years and the foundation of the pepper exchange would be taken up on an urgent footing.

Binh said farmers would certainly benefit from pepper futures trading.

Currently, farmers sold their pepper directly to traders and prices often fluctuated significantly depending on the demand. With futures trading, farmers could avoid dependence on traders.

Tran Huu Thang, a farmer with 3.2 hectare pepper farm in Dong Nai Province’s Xuan Loc District, said to Dan Viet newspaper that he expected futures trading to start soon and help farmers reduce the dependence on traders.

Dang Van Chinh, a pepper grower in Binh Phuoc Province said that it was good that futures trading would help keep prices stable. However, he was afraid that the requirement on the output for futures trading could cause difficulties to farmers.

Transport fees and procedures were also a matter of concern for farmers, Chinh said.

Late last year, a memorandum of understanding was signed between the Vietnam Pepper Association and the Indian Spice Board, the Indian government’s regulatory and promotion agency, for starting futures trading for pepper in Vietnam.

Futures trading for agricultural commodities was not a new idea.

In fact, Vietnam had Buan Ma Thuat Coffee and Commodity Exchange, a pilot cashew exchange in Binh Phuoc Province and the Vietnam Commodity Exchange. However, those models failed to attract a large number of farmers as they found it inconvenient to bring their products to one exchange.

Vietnam is the world’s largest pepper producer and exporter with an annual output of 150,000 tonnes.

In the first four months of this year, Vietnam shipped more than 69,000 tonnes of pepper abroad, worth 561.86 million USD.-VNA