Vietnam's 2008 pepper output down slightly, prices up

HANOI, July 17 (Reuters) - Vietnam, the world's largest black pepper producer, has completed harvesting up to 87,000 tonnes of the spice, down slightly from last year's output, an industry body said.

Farmers in southern Vietnam ended their harvest in late June, having picked an estimated 85,000 tonnes to 87,000 tonnes of pepper, compared with 90,300 tonnes last year, the Vietnam Pepper Association said in a report obtained by Reuters on Thursday.

Vietnam's pepper output this year would account for around a third of global production estimated at 259,000 tonnes, while consumption would be 305,000 tonnes, according to figures released by the association in May.

The association said good weather so far and high prices would make this year's production a success.

Vietnam exported 47,000 tonnes of pepper, 5,070 tonnes of which was white pepper, in the first half of this year, up 7 percent from the same period last year, while revenues jumped 28 percent to $166 million, the association cited customs figures as showing.

The six-month earnings meant an average export price of $3,530 for a tonne of pepper, a rise of nearly 20 percent from the same period last year.

Vietnam, which consumes only 5 percent of its pepper output, also buys about 10,000 tonnes of Cambodian pepper annually for re-export.

The association forecast prices could stay at the current level for the rest of the year. It did not give a clear reason but said the forecast was based on market supply and demand.

Vietnamese farmers and exporters may still be left with a combined 35,000 tonnes of the spice, after deducting the export volume and domestic consumption.