~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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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.