Vientiane: The Food and Agriculture Organization of the United Nations (FAO) and the Lao PDR government are joining forces to explore opportunities for boosting the investment and export potential of the country's chili pepper sector. This initiative is part of FAO's Hand-in-Hand Initiative, which seeks to promote agricultural investments in the Lao PDR.
According to Lao News Agency, chili pepper is identified as a priority commodity under the FAO Global Hand-in-Hand Initiative in Lao PDR. The initiative's goal is to increase the income of smallholders and enhance value addition by fortifying the chili value chain, improving market access, and attracting investments for export-oriented production. The Lao chili pepper has already garnered interest from international buyers and investors, particularly from China and the Republic of Korea, as evidenced by the HiHI Global Investment Forum 2025 in Rome.
Dr. Phommy Inthichack, Deputy Director General of Planning and Cooperation of the Ministry of Agriculture and Environment, expressed optimism about the sector's potential in both domestic and international markets. FAO Representative in Lao PDR, Kyung-Mee Kim, emphasized the organization's role in assisting the country to realize this potential through technical assistance and facilitating connections with international markets and investors.
A Stock-Taking Workshop assembled around 70 participants, including representatives from government agencies, research institutions, producer organizations, and the private sector. The workshop aimed to validate findings from a Stock-Taking Survey and Value Chain Analysis conducted in May and June 2026. FAO's team presented current data on chili production, practices, pricing, and key stakeholders in main provinces and districts.
The workshop also highlighted the differing export strategies required for China and Korea. China, a net importer of dried chili, offers 0% tariff access for Lao products, while Korea's high tariffs make frozen or processed chili the most viable entry route. Recommendations included focusing on dried and processing-grade chili for China and frozen/minced chili for Korea, while prioritizing compliance, SPS requirements, traceability, cold-chain infrastructure, and aggregation systems.
The participants agreed on the strong potential for Lao PDR's chili sector to transition from a household crop to a commercial value chain. However, key constraints such as reliance on imported inputs, post-harvest losses, climate risks, and SPS compliance requirements were identified. Overcoming these challenges will require focus on compliance with market access requirements and investment in supply-side readiness.
Stakeholders at the workshop reached a consensus on a prioritized action plan to address these gaps. The validated data will form the basis of the Lao Chili Pepper Investment Brief, which will support an upcoming Business Matching Event in August 2026, aimed at connecting Lao suppliers with international buyers and investors.