Ministry finds no proof of alleged pepper price scam
Ministry finds no proof of alleged pepper price scam
The Ministry of Industry and Trade (MoIT) has not found evidene supporting accusations by the Viet Nam’s Pepper Association (VPA) of price manipulation by foreign traders in the pepper market.
VPA claimed on its website that domestic pepper prices had been fluctuating abnormally since late July due to price manipulation by Chinese traders.
VPA said its members reported that Chinese traders ordered large quantities of pepper from domestic exporters, pushing them to deliver as soon as possible, which created the market signal of large demand. Therefore, many Vietnamese exporters had to buy pepper from farmers and agents at high prices in order to meet the terms of these contracts.
However, they did not pay deposits on the signed contracts, claiming the money transfer was delayed due to bank paperwork.
At the same time, the Chinese traders contacted local pepper supplying agents and promised to sell them pepper at below market value. The agents agreed, aiming to then sell it on to exporters. However, the Chinese businesses only sold them a small portion at a low price, then claimed the product was out of stock and raised the price sharply.
The Chinese firms terminated the high-price contracts they initially signed with exporters, and local exporters were unable to contact them.
After receiving information about the alleged scam, the ministry asked VPA to provide a list of local exporters affected by such transactions. However, VPA said it did not have suffiicient resources to list the enterprises. In addition, businesses would not share information about their partners.
“We do not have sufficient basis to conclude that foreign traders have been manipulating the pepper market. However, we will co-operate with the departments of industry and trade to closely supervise the market and ensure a healthy business environment for pepper in particular and agricultural products in general,” MoIT said.
In the first seven months of 2017, Viet Nam’s pepper export volume was estimated at 145,000 tonnes and valued at $800 million, up 20.4 per cent in volume but down 18.2 per cent in value against the same period last year, Ministry of Agriculture and Rural Development reported.
The pepper price on Thursday was hovered at VND90,000 ($4) per kilo in the southern region. In Dong Nai Province, the pepper rose by VND1,000 per kilo while that in Ba Ria – Vung Tau Province was reduced VND1,000 to VND91,000 per kilo.
The local pepper industry has been urged to apply agricultural standards for its sustainable development as well as meeting with the import markets’ requirements.
Many farmers have shifted into clean pepper production to penetrate into demanding markets.
In the beginning of the year, VPA forecast the country’s pepper exports this year would face difficulties. Most of its pepper importers would increase measures to control imports’ quality, especially in the EU and US.
