Continued price drop makes Kingdom’s pepper unprofitable

The Kingdom’s non-GI pepper farmers continue to struggle due to low prices while cultivation is projected to decline next year, said Dar-Memot Pepper Agriculture Development Cooperative executive director Yin Sopha.

Sopha said the market price for non-GI pepper this year is still under the margin of cost production, as the sector is expected not to expand next year.

Since the beginning of the harvest season, pepper prices have stood at $2.6 per kg, which are under the profit margin. He said the lower price is due to the global market.

“Pepper prices cannot increase anymore, as the pepper industry’s global supply is more than the need – the price is not beneficial for farmers and the growth of cultivation will not increase anymore.”

Sopha said that the sector would no longer be a viable investment option if prices keep dropping.

A new federation
As of 2016, the Kingdom had 5,000ha of pepper fields, according to a report from the Ministry of Agriculture, Forestry and Fisheries, which claimed the country’s pepper exports grew from 1,050 tonnes in 2016 to 2,698 tonnes last year.

The government has formed a new federation for the country’s pepper industry to enhance the market and solve challenges in the sector, as the cash crop is currently facing depressed prices.

The Cambodia Pepper and Spice Federation was jointly formed last month by the Ministry of Commerce and the Ministry of Agriculture, Forestry and Fisheries.

The federation will promote the value of pepper and look for new markets, especially for non-GI pepper so that farmers will not rely on informal exports to Thailand and Vietnam.

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