Pepper

Cambodia Pepper Exports Fall by 70 Percent

Cambodian pepper farmers are battling against a reduced demand in exports due to Covid-19 and plummeting prices
Pepper on sales in a market in Phnom Penh. Kiripost/Siv Channa
Pepper on sales in a market in Phnom Penh. Kiripost/Siv Channa

Cambodian pepper exports have plunged by nearly 70 percent due to a fall in consumption caused by Covid-19.

According to the Ministry of Agriculture, Forestry, and Fisheries, pepper exports amounted to 6,990 tons in the first seven months. It reduced pepper exports by nearly 70 percent compared to the same period the previous year, when Cambodia sold 22,580 tons.

Cambodia supplied 6,298 tons of pepper to Vietnam, Germany imported more than 608 tons, and Taiwan received 21 tons, including several other countries in the first seven months of this year.

Mak Ny, President of the Cambodia Pepper and Spice Federation, said the main reasons for the decrease in exports are price and Covid-19. As a result of Covid-19, many restaurants and hotels have closed, causing a decrease in consumption.

“Compared to last year, it's about 2,000 riels to 3,000 riels. Previously, the farmers could sell it for around 15,000 riels in this month, but now they can only sell it for 12,000 riels,” he said.

Cambodia generally produces about 20,000 tons of pepper per year, which is exported mostly to Vietnam. Aside from Vietnam, Kampot pepper is exported to Germany, the European Union, North America, and some to China and Korea, he said.

This year's pepper exports have reduced due to fewer farmers selling pepper as they wait for prices to rise. Therefore, exports will definitely increase when the price rises, he added.

“As I mentioned, due to the price fall, some farmers do not want to sell it, so they stock it first. Even if they sell it, they won’t make any profit,” he said. “When the price rises, they will sell it, causing exports to rise as well.”

Oun Batham, also known as Sai, is the owner of Sai Farm at Rattanakiri. He said he sold around 12,000 riels per kilogram previously. However, it sold for between $8 and $9 per kilogram when he first harvested it, and those who sold it when it was extremely valuable received more than $10.

“This price is steadily falling from $8 to $6. In 2020, it’s only $2 or more, it’s really cheap for 2019 and 2020,” he said. “Now, it has only returned to $3. It’s better than compared to before [2020].”

He added that as prices declined it has caused him losses as he spends about $20,000 each year for the operation on a hectare. Additionally, as he cultivates the pepper in around 2,000 canals per hectare, he can only harvest 5 to 8 tons.

“If we only get $3 per kg, we can earn around $15,000 if we harvest 5 tons of pepper. Meanwhile, we have to pay up to $20,000 per hectare,” he said. “Also, we have to pay for labor, irrigation, and soil, so it [the spending] might be even more.”

He said that according to a study if the price of pepper plummets below $3.5, farming is not profitable. However, he must sell the pepper even if the price lowers since he has already spent a large sum of money, he added.

“Even if the price falls, we must sell to recoup our investment and continue to maintain the farm. As my plantation doesn’t just grow peppers, we cultivate other plants, so we can have some money for the peppers,” he said. “I hope that the price of pepper will return in the next year or two years.”

Meanwhile, Theng Savoeun, director of NGO Coalition of Cambodian Farmer Community (CCFC), said that diplomatic relations between the Ministry of Commerce and other countries, as well as the relevant authorities, departments, and ministries, are critical in promoting Cambodia's pepper exports.

He added that the state should have more campaigns, particularly those aimed at distributing information and assisting smallholders to be in a pepper community. Therefore, they have the chance to learn about the challenges, quality, and export demands.

“More importantly, they should encourage farmers and promote the local market, which means that they should consider selling the pepper locally and should have a campaign to encourage local people to buy goods,” he said.