Pepper plants in Vietnam
As a rule, shoppers have no clue where the spices they crave come from. In the case of black pepper, there’s a good chance it comes from Vietnam, the world’s largest supplier.
There’s a good chance pepper prices at the grower/wholesaler level will vary a lot this year. While that, like most raw commodity price changes, is unlikely to directly affect you, it’s worth considering that, if you bother to read ingredient labels, you’ll find pepper showing up in way more things than you’d have suspected; And ingredient prices, collectively, definitely influence products’ shelf prices. Not a lot, where an individual ingredient is concerned – probably not even a noticeable amount.
But when several ingredients prices go up more or less in synch, so, sadly, will the total price of your shopping cart of goods. (We’ve all noticed that prices aren’t prone to drop, when underlying conditions change, as quickly as they rise!)
Of course that’s an extreme example of how, and/or why, retail product prices rise. But sometimes, as consumers, we need to pause before blaming the retailer for a price rise and consider, as it were, the source.
In the case of black pepper, currency exchange rates have in recent years had a dramatic impact on what farmers receive for their crops. Meaning, in turn, what users – product manufacturers/processors, for the most part – pay.
The website Vietnamnews.vn noted recently that from 2012 to 2016, when the price of black pepper peaked at VNĐ220,000 (US$9.6) per kilo – a kilo is roughly 2.2 pounds – locals rushed to grow the plant.
When the price shot up, more farmers planted pepper, often borrowing to do so. When the price fell, to as low as VNĐ55,000 ($2.35 per kilo) at the end of 2016, many farmers were seriously hurt, many fatally, and the debt load too often was overwhelming for newcomers and some old-timers as well.
Mai Liệu, of Ia Blứ Commune in Chư Pứh District, said that pepper had once made some farmers “millionaires”, but now the same farmers are in serious debt. They have had to sell their houses and land, and have even left their hometowns to work in other provinces.
“Smaller pepper farming households have fallen into even more miserable situations, including displacement from their homes,” Liệu said.
Commune chairman Phan Văn Linh said that farmers borrowed bank loans to grow pepper when prices soared, but then stopped growing the plant when prices began to drop.
The farmers were unable to pay back bank loans even after seeking “black credit”, Linh said.
According to figures from Gia Lai’s agricultural sector, the province’s black-pepper growing area expanded to 16,000ha – a hectare [ha] is close to 2.5 acres – last year, though only 6,000ha of pepper were officially planned to 2020.
Between those problems and a pepper pest that seriously affected many acres of the spice a couple of year ago, times have been tough for many of those producers of many people’s favorite spice.