Pepper Sector Profile

Cambodia has a tradition of more than 700 years and a natural comparative advantage in pepper cultivation. Black pepper (Piper nigrum) is a climbing vine, and its fruit is usually dried and used as a spice and seasoning. It been used since antiquity for its flavour and as a medicine, and is the world’s most traded spice.

Cambodia has an excellent climate and soil conditions for pepper, and pepper production was mentioned as early as the 13th century. Especially during the French colonial times so-called “Kampot Pepper” (from the province of Kampot) developed a reputation for its special taste. Intensive production started in the early 20th century, and at its height, production and exports of pepper may have been up to 8,000 tons per year.

However, practically the entire pepper production in Cambodia came to an end during the period of the Khmer Rouge. Pepper production was only gradually re-established after the 1990s.

The pepper sector can contribute to Cambodia’s economic development, increase farmers’ income and reduce poverty. World production of pepper grew roughly four-fold in the past 50 years, from about 100,000 tons in the early 1960s to about 400,000 tons in 2010. Although there are no official statistics on Cambodia’s pepper production, production is estimated at 4,500 tons in 2010, which would place Cambodia among the world’s ten largest pepper producers.

Domestic consumption is estimated at about 300 tons per year, the rest is exported, mainly informally to Thailand, which is why official export data seriously underestimate the true extent of exports. Today, Kampong Cham –with its fertile red soil– produces over 90% of Cambodian pepper.

Kampot pepper is small in terms of production, but well known and received the status of geographical indications in 2010. There are 2,000 to 2,500 farmers in Cambodia’s pepper sector, most of which smallholders with less than 0.5 ha of land. In total, an estimated 5,000 workers are involved in Cambodia’s pepper sector, including seasonal workers.

The pepper sector has the potential for increased exports and value addition. Pepper is part of the “fruits and vegetables” sector, which is one of the 19 potential export sectors identified in Cambodia’s Trade Integration Strategy (2007). Pepper is also among the “Top Ten Products” in five provinces: Kampong Cham, Kampot, Kep, Kratie, and Sihanoukville.

There are ample investment opportunities to expand pepper plantation in Cambodia, including in Mondulkiri, Rattanakiri, Koh Kong and Sihanoukville. Smallholders, especially in privileged land, could enjoy higher revenues by planting pepper instead of other crops, since world prices for pepper have sharply increased in the last few years due to strong demand in international markets.

However, the pepper business is risky: pepper is a cash crop with high potential income but it needs relatively high investment, income begins only two years after planting, and is uncertain because prices are very volatile. There is also potential to add value throughout the entire value chain–e.g. new or higher quality activities and products, such as white pepper, pepper oil, perfume, soap, tea, cookies– once critical constraints are effectively addressed.

Possible solutions include better and more appropriate inputs, better training about cultivation and post-harvesting methods, improved processing capacity, and information about markets for export diversification, including organic and niche markets.

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