Cambodia: Condiments of the house come at a cost

• Sep 28, 2020

The price of pepper in the world, and in Cambodia in particular, has dropped considerably in the last three to four years. The decline was caused because the supply of pepper in the global market exceeds market demand. The pepper price fell from $9 to $10 a kilogramme in 2016, to only $2.5 to $3 per kilogramme in 2018 and between $1.5 to $2 in 2019 and 2020 respectively. However, production costs $2.59 a kilogramme.

This has prompted farmers and pepper processors to cut their workforces, reduce maintenance of farms and some have even given up pepper farming to grow other crops. Khmer Times’ Sok Chan, spoke with Mak Ny, president of the Cambodia Pepper and Spices Federation about ways to support farmers, restore pepper prices in the Kingdom, as well as creating a plan to promote local pepper products.

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KT: Could you provide a brief history of the Cambodia Pepper and Spices Federation?

Ny: Cambodia is the home of pepper production. Pepper is grown across the country. Therefore, it is difficult to gather farmers into one group and also difficult to attract investors and buyers to this sector. We began working with NGOs [nongovernmental organisations], the Ministry of Commerce and the Ministry of Agriculture, Forestry and Fisheries to establish and support the Cambodia Pepper and Spices Federation in November.

Then we started drafting  guidelines to support and strengthen the abilities of pepper producers and farmers. We also brought export companies to meet farmers to discuss the price and purchasing volume regarding their needs and the needs of farmers to produce pepper. We also promote Cambodian pepper to the international market in terms of its [special] taste and spicimess.

KT: What are the results that the federation has achieved so far?

Ny: What we achieved is that we have one strong group as the Cambodia Pepper and Spices Federation to represent the country. We also trained farmers in techniques to grow and maintain the crop and we have companies to purchase the pepper and export it to the EU and other countries. We have nine export companies and 15 associations and communities members across the country.

The 15 associations and communities consist of 600 to 700 hectares of pepper plantation. However, it provides a model for other pepper farmers and producers to join us to improve benefits. We also call on other pepper producers and farmers to join the federation. At present, there are about 6,000 to 7,000 hectares of pepper plantations with a yield of 15,000 tonnes to 20,000 tonnes per year. However, this is just an estimate. We want farmers to come together to determine a more precise figure so that we can work with the exporters.

KT: What are the provinces that can grow pepper in the country?

Ny: Pepper is grown across almost all of the country, but the largest number of pepper plantations is in Tboung Khmum, Kampot, Kampong Cham, Ratanakiri and  Mondulkiri, while it is also grown in Pursat, Koh Kong, Battambang, Pailin, Kampong Thom, Siem Reap, Preah Vihear and Stung Treng.

KT: What are the current issues with pepper production in the Kingdom? What elements have you asked the government to support?

Ny: Now, the price of pepper is down, but it is a global issue and we alone cannot manage and solve it immediately. It is related to oversupply. Normally, through our research, global pepper consumption is 400,000 to 450,000 tonnes per year, but global production of pepper is around 600,000 tonnes, so it exceeds demand. However, although we know the price of pepper is down and farmers are losing money, the federation always advocates farmers to reduce production costs by making sure that they use proper fertiliser, improve irrigation systems and diversify their crops.

We hope the pepper price will rise in the near future. In the short term, we cannot control the market, so farmers have to make sure the amount of their pepper products is low and we have to process the pepper into by-products. We have also asked the government to open more markets. We asked them to provide technical expertise to advocate farmers to produce pepper with a low production cost and yield. We want to have a pepper standard in the future. We want more processing investment in this sector.

KT: How many tonnes of pepper do Cambodians consume per year?

Ny: The local consumption of pepper is about 2 to 3 percent of total production. We grow pepper for export largely. The 2 to 3 percent is equivalent to about 500 to 1,000 tonnes of pepper consumed locally. Now, we mostly depend on the Vietnamese market to export our pepper, but our federation wants to attract more investors or buyers to export directly from Cambodia. At least we would have added-value from this. Our export members cannot absorb all the production. They can export about 3,000 tonnes for normal pepper. We also aim to attract investors to process our pepper locally.

KT: Cambodian pepper is divided into general pepper, good agriculture practice (GAP) pepper, organic pepper and Geographical Indication (GI) pepper. Do you have the percentage of each category? At what price will farmers break even?

Ny: Our GI pepper is around 70 to 100 tonnes per year, organic pepper is 100 to 150 tonnes per year, while GAP pepper is 1,000 tonnes, so the rest is general pepper. Generally, profit from pepper varies according to its source area but, on average, if the price is about $2.5 per kilogramme, farmers will see a profit margin, but not much.

Source: https://www.khmertimeskh.com/50767319/condiments-of-the-house-come-at-a-cost/