China seeks Vietnam pepper, coffee growers cut trees

Chinese buyers have been in Vietnam seeking to buy black pepper at high prices, raising expectations of good gains that have prompted some coffee farmers to switch to growing pepper instead, a state-run newspaper and traders said on Wednesday. Pepper prices in Vietnam, the world's largest producer and exporter of the spice, have more than doubled to as high as 120 million dong ($5,825) a tonne this week from 52 million dong a year ago due to production falls in many producing nations.
"Now in Gia Lai province and the northern part of the central region, many Chinese companies have arrived seeking to buy pepper and accepted extremely high prices," the Vietnam Agriculture newspaper quoted Chairman Do Ha Nam of the Vietnam Pepper Association as saying.
Nam said Chinese buyers offered to buy the spice at more than the record 120 million dong per tonne. Pepper prices have risen 45.5 percent from the end of January, before Vietnam started its 2011 harvest. The active purchase by Chinese buyers emerged this month, though China was not among the top 10 buyers of Vietnamese spice during the first quarter ended March, based on the pepper export data compiled by Vietnam's Agriculture Ministry.
The pepper harvest is once a year and due to end in late May. Nam was quoted by the Agriculture Ministry-run newspaper as speaking at an annual conference of the pepper association on Tuesday in Ho Chi Minh City. The association has advised farmers to avoid cutting other crops to plant more pepper due to the high prices, the newspaper said.
COFFEE CUTTING But the word has yet to reach part of the farmers in the Central Highlands coffee belt, where old coffee trees in several farms have been cut down so far this year, a coffee trader said. "They think of good pepper prices," he said.
"Pepper vines can become productive in two years, but nobody is sure if prices would remain high," the trader said from Buon Ma Thuot, the capital city of Daklak, Vietnam's top coffee growing province. He has no statistics on the total affected areas.
Traders in Daklak and Lam Dong, Vietnam's second-largest coffee growing province, said the cutting may not slash output, which has been forecast to rise 10 percent in the next 2011/2012 harvest to 22 million bags. Vietnam is forecast to export 98,000 tonnes of pepper this year, down 16.2 percent from nearly 117,000 tonnes shipped in 2010, the Agriculture Ministry's Informatics and Statistics Centre said, in a downward revision of its earlier forecast. The report, issued in early April, revised the export volume from 115,000 tonnes forecast in January. Pepper exports between January and April will drop an estimated 5.3 percent from the same period in 2010 to 42,100 tonnes, the government said on Wednesday.