In the first six months of 2021, Vietnam's pepper exports were estimated at 155,000 tonnes, earning 500 million USD. (Photo congthuong.vn) In the first six months of 2021, Vietnam’s pepper exports were estimated at155,000 tonnes, earning 500 million USD. The exports decreased by 7 per cent involume year on year, though increased by 41 percent in value due tohigher export prices, VPA said.
On top of the decrease in pepper output this year due to the COVID-19pandemic, logistics costs are behind the decrease in pepper export volume.
The logistics costs include two main parts – wharf fees(including loading and unloading of goods, as well as administrativeprocedures) and costs related to shipping containers by sea.
The local enterprises said that the cost of shipping pepper from Vietnam to keyexport markets such as the US and the EU increased sharply in the first six monthsof 2021. This upward trend has shown no signs of slowing, according to theassociation.
VPA said freight costs for routes from Vietnam to the US and the EU haveseen strong increases of 1,500-2,000 USD for a 40-foot container every twoweeks.
The cost of shipping commodities now is about 13,500 USD for a 40-footcontainer from Vietnam to the US, much higher than 2,000-3,000 USD in 2020.
In 2020, this cost was stable at 800-1,200 USD for a 40-foot containershipped to the EU, but it has surged sharply since the beginning of 2021 toover 11,000 USD at present.
According to the association, shipping lines said the higher freightcosts are due to a shortage of empty containers.
However, the number of containers through Vietnamese ports in the first quarterof 2021 has nearly doubled compared to the same period last year, while Vietnam’sexports also increased in the first five months of 2021, it said.
"Thus, the claims of a lack of empty containers given by the shippinglines is incorrect," VPA told chinhphu.vn.
VPA also said the freight for containers shipped from other Asian countriessuch as India to the US and EU have not increased as much as the freight forcontainers coming from Vietnam. This freight increase is unreasonable andabnormal because the oil prices and core cost of shipping, is at a muchlower level than before.
This has caused US and EU importers to switch to buying pepper fromBrazil because the shipping cost is only a third of that from Vietnamand to the EU is only one tenth. Additionally, the quality ofBrazilian pepper is similar.
Vietnam’s pepper exporters are forced to cut back on profits and even acceptlosses to keep these two important markets, the association said.
Along with the impact of the COVID-19 pandemic over the past two years, thehigh freight cost has pushed many local export enterprisesinto difficulties. Meanwhile, most local pepper exporters are small andmedium-sized enterprises with weak finance, so they face a high risk ofbankruptcy or dissolution.
VPA has reported this situation to the Ministry of Industry and Trade, theMinistry of Transport, the Ministry of Agriculture and Rural Development, theGeneral Department of Vietnam Customs and the Vietnam Association of LogisticsService Enterprises with a hope that the Government will develop solutions toremove these difficulties./.
VNA
