Continued price drop makes Kingdom’s pepper unprofitable
Tesla Model 3 deliveries due to start in February
THE Kingdom’s non-GI pepper farmers continue to struggle due to low prices while cultivation is projected to decline next year, said DarMemot Pepper Agriculture Development Cooperative executive director Yin Sopha.
Sopha said t he market price for non-GI pepper t his year is still under the margin of cost production, as the sector is expected not to expand next year.
Since the beginning of the har vest season, pepper prices have stood at $2.6 per kg, which are under the profit margin. He said the lower price is due to t he globa l market.
“Pepper prices cannot increase anymore, as the pepper industr y’s globa l supply is more than the need – t he price is not beneficial for farmers and t he grow t h of cultivation will not increase anymore.”
Sopha said that the sector would no longer be a v iable 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 t he Ministr y of Agriculture, Forestr y and Fisheries, which claimed the countr y’s pepper exports grew from 1,050 tonnes i n 2016 to 2,698 tonnes last year.
The government has formed a new federation for t he countr y’s pepper industr y to enhance the market and solve challenges in t he sector, as t he cash crop is current ly facing depressed prices.
The Cambodia Pepper and Spice Federation was joint ly formed last month by the Ministr y of Commerce and t he Ministr y of Agriculture, Forestr y and Fisheries.
The federation will promote t he va lue of pepper and look for new markets, especia lly for non-GI pepper so t hat farmers will not rely on informal exports to Thailand and Vietnam.
AMRU Rice (Cambodia) Co Ltd CEO Song Saran, who has been elected as t he federation’s president, said it was look ing for technica l assistance before setting up to address key issues.
“We have no update yet about pepper prices. Right now we are look ing for technica l assistance to support t he federation. We will address t he key issues happening now and formulate f urt her action,” he said.
Vorn Savourn, a pepper farmer in Tbong Khmum province’s Memot district who owns a 5ha pepper field, said t he industr y st ill relies on informal buyers.
“I have no hope for an increase in pepper prices. Most [pepper] farmers here [are considering selling t heir farms] since they cannot pay back loans,” he said, adding t hat pepper farming is no longer a good choice for farmers as t here is no sustainable market.” TESLA Motors said on Wednesday it will begin European deliveries of its long-awaited mass-market Model 3 electric car from February.
A spokesperson told AFP the first to take delivery would be customers who had reserved their Model 3 starting March 2016 if they confirm their order by January 1.
The spokesperson said customers would be invited to confirm over the coming weeks, starting on Wednesday.
Tesla’s mid-size, four-door all-electric family car was first unveiled in its US home base in July last year.
Controversial founder Elon Musk in October described the Model 3 as “the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume”.
Musk, recently forced to step back from the role of chairman over a tweet in which he said he planned to take the firm private, says he wants to make the Model 3, which currently starts at around $50,000, a “mainstream product.”
With its mid-range battery pack the Model 3 is more compact and lighter than the brand’s luxury S and X models and is designed to make Tesla world leader as a producer of electric cars as it scales up production capacity.
The company has in recent weeks seen sales volumes comparable to more established marques such as German trio Audi, BMW and Merc e des, despi t e its much narrower product range.
Tesla now looks to have overcome production capacity concerns which have worried investors for months. Between January and September the firm said global deliveries of all models had reached 126,000 – more than 53,000 of those coming in the third quarter.
If the brand can keep that up then deliveries this year are set to hit around 180,000 compared with 100,000 last year.
For the time being, European customers will only have two Model 3 options.
One is a long-range version delivering 544km on a single charge costing from around € 60,000 ($ 68,017) before any incentives such as the “ecobonus” in France worth € 6,000. A dua l-motor Per formance model sta r ts f rom a round € 70,000.
Tesla has promised to supply much cheaper versions in due course, coming nearer to the initial $35,000 pricing.
The automaker has not indicated how many Model 3 reservations European clients have made.
Dar-Memot Pepper Agriculture Development Cooperative executive director Yin Sopha says the market price for non-GI pepper is still under the margin of cost production.