Vietnam sniffs out niche in world spice trade
HANOI - The
pungent aroma of pepper and
cinnamon is starting to waft from
warehouses in Vietnam as the
country eyes a niche in the world
spice trade.
Already a top grower and exporter
of rice and robusta coffee, Vietnam
has burst onto the pepper market in
recent years and is now moving into
cinnamon, star anise, ginger, turmeric
and herbs, foreign traders said.
David Marchington, director of
brokers Chambers and Knight Ltd in
London, predicted Vietnam would
make further inroads into the pepper
trade.
``Vietnam is a very serious force in
the world pepper market,''
Marchington said by telephone. ``If
you look at black pepper
particularly, in the space of five
years, Vietnam has joined the
world's major producers and is
highly rated.
``In the short term, Vietnam will
produce more because prices are
high and that gives every
encouragement for farmers to grow
as much as they can,'' Marchington
said.
He added that pepper from Vietnam
compared favorably on quality with
similar grades found elsewhere.
Vietnam, which ships most of its
pepper abroad, has targeted exports
of 20,500 tons this year from 15,000
tons in 1998.
From January to May, exports were
worth an estimated $66 million.
Prices have ranged from $3,300 to
4,000 a ton FOB Saigon Port in the
past six months.
Some traders say Vietnam is now the
world's second-largest black pepper
exporter after India.
But it is the more exotic spices in
Vietnam such as cinnamon, star anise
and ginger that excited Mark
Barnett, director of Pacific Basin
Partnership.
Barnett's company has a cooperation
contract with the Vietnam National
General Export-Import Corporation
1 to process cinnamon for export to
world markets.
He said the venture, which operates
a processing factory near Hanoi, was
the key player shipping cinnamon
from Vietnam.
``Vietnam hasn't yet realized its niche
market potential in cinnamon,''
Barnett said. ``But several major
American companies have begun
using Vietnamese cinnamon in recent
years.''
He added that Vietnam's cinnamon
exports were currently around 2,000
tons a year worth $3.5 million of
annual world trade of 45,000 tons
and that figure would rise.
He expected Vietnam's cinnamon
exports to grow 50 percent within
three to four years, with key
destinations to Europe and the
United States.
Barnett said decades of war in
Vietnam and a lack of processing
facilities had left farmers unable to
utilize a prime climate and fertile soil
in which to grow cinnamon.
In addition, a weak rupiah currency
in the past two years had helped
Indonesian growers fortify market
share.
Barnett said cinnamon was grown in
central and northern areas of
Vietnam on some 37,000 acres of
land.
Meanwhile, several thousand tons of
star anise -- a spice often used in
Chinese cooking -- were being
exported.
Barnett said ginger and turmeric
were grown in abundance, with
several companies from Hong Kong
and Taiwan making regular
purchases. He added that there was
also potential for chilipeppers and
paprika.
Reuters - June 21, 1999.
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