Pepper exporters need to mobilise capital in order to construct storage facilities, and buy input materials and equipment, says Chairman of the Viet Nam Pepper Association (VPA) Do Ha Nam.
If the capital issue can be solved and storage facilities built, then companies can respond effectively to price fluctuations in the global and domestic markets, says the chairman.
The VPA is seeking greater controls over supply levels. Historically, prices in the global market rise late in the year, which is a problem for growers since harvesting usually occurs in the first three months.
Storage facilities would help manufacturers and farmers stockpile pepper until prices become more attractive.
Namforecasts pepper prices will rise to $2,500 a tonne later this year.
Currently, the global market is heating up due to lower supplies from other major producing nations like Indonesia and India where crops have been hit by disease. This anomaly is benefiting growers, but will not last forever.
On India’s National Commodity and Derivatives Exchange, pepper futures for February delivery were trading at Indian-Rs 12,938 per 100 kilograms, up more than 13 per cent compared to early January.
The association is also pushing for more trademarks to be established.
VPA Deputy Chairman Nguyen Dung is heading a new co-operation between farmers and Gia Lai provincial authorities to build the Chu Se brand name.
"Vietnamese enterprises and planters in 2006 suffered a loss of US$30 million in exports because the industry did not have a well-known trademark," says Dung.
Chu Se was only introduced this year, and is Viet Nam first licensed trademark.
To help branding, says Dung, everything from seed selection to distribution has been supervised carefully. Farmers will contribute VND50,000 a hectare per year to help with advertising and marketing efforts, while 60 per cent of the project total funding has come from provincial authorities.
Viet Namlast year shipped about 116,000 tonnes of pepper, making it the world largest exporter with a 60 per cent stake in the global market. As a result, companies earned $190 million in revenue, a 26.2 per cent year-on-year increase, according to the Trade Information Centre.