Viet Nam’s pepper products to be traded on VNX
Viet Nam’s pepper products to be traded on VNX
The Ministry of Industry and Trade has added pepper to the list of commodities traded on the Viet Nam Commodity Exchange (VNX), according to the ministry’s Decision 1071/QĐ-BCT issued on Wednesday.
Those pepper products to be traded on the VNX include black and white peppers with code H.S 090411 and black and white ground pepper with code H.S 090412.
Trading on the exchange will allow Viet Nam’s pepper industry to become increasingly professional in its global trading activities, reported the Viet Nam Pepper Association.
Viet Nam’s peppers account for 60 per cent of total pepper volume trading on the world market, so the price of Vietnamese pepper has always had great influence on global pepper prices, noted officials.
Pepper traded on VNX will also connect to commodity exchanges in the world market, allowing for the transparency of information being exchanged, reducing risks during trading and offering insured pricing.
Since 2014, the Vietnamese Government has planned to build the VNX, with the co-operation and support from the Indian Government. The two governments have discussed the building of co-operation mechanisms and technical support between the two countries, which are the two largest pepper producers in the world. Then, these countries can co-ordinate between them in regulation of the global pepper market.
The Ministry of Industry and Trade’s Domestic Market Department said pepper, added to the list of commodities trading on the VNX, is very beneficial to the domestic pepper industry.
However, the ministry’s Legal Department said the trading of commodities on the VNX has seen many problems due to regulations of Decree 158/2006/ND-CP, which is why the State should amend some regulations in the decree to create favourable legal conditions. This would help the VNX to operate more efficiently.
Therefore, the ministry will continue to submit to the Government amendments and supplements to Decree 158, to make transactions on the VNX more favourable.
VNX has been licensed by the Ministry of Industry and Trade to operate with a total charter capital of VND150 billion.
Currently, there are three farming commodities trading on VNX, including rubber, coffee and pepper.
In the first two months of this year, the export volume of pepper reached about 16,000 tonnes, earning US$112 million. The exports had a year-on-year reduction of nearly 20 per cent in volume and 36 per cent in value.
The reduction was due to the global pepper price, which dropped by 20 per cent on the world market against the same period last year.
Viet Nam’s largest pepper export markets in the first two months included the US, India, Germany and the UK, accounting for over 41 per cent of total pepper exports.
In 2016, Viet Nam’s pepper exports reached 177,893 tonnes, earning $1.43 billion, an increase of 35.3 per cent in volume and 13.5 per cent in value, year-on-year.
According to the Ministry of Industry and Trade’s target in 2017, pepper will be in the group of 13 export items having export values of over $1.5 billion. The local pepper industry’s export turnover this year was expected to reach $1.6 billion, up 13 per cent over 2016.
