Together with coffee, pepper has entered a period of sharp price increases. Black pepper is being traded at VND97,500-98,500 per kilogram in the domestic market.

Pepper exports have increased recently with 3-digit growth rates in some markets. The export volume in April reached an 11-month high.

The latest report from the Ministry of Agriculture and Rural Development (MARD) showed that in April, Vietnam exported 27,000 tons of pepper, collecting $117 million. As such, the export volume increased slightly by 2.2 percent compared with the same period last year, but export value rose sharply by 40.4 percent.

The total export volume in the first four months of the year was 83,783 tons and export turnover were $353 million, down by 18.3 percent in quantity and up by 11.5 percent in value.

The average export prices increased for the fourth consecutive month in April, reaching $4,342 per ton, up 37.4 percent over April 2023. The figures were $4,214 per ton and 36.4 percent in the first four months of the year.

Huynh Tan Dat from MARD said pepper exports make a significant contribution to the country’s GDP and improve farmers' livelihood.

Vietnam has 40 percent of output in the world and 60 percent of export market share.

In the basket of spices, pepper accounts for a large proportion. Pepper is also used to make drugs, cosmetics and healthcare products. The world’s pepper market is valued at $5.43 billion and is expected to have an average growth rate of 20 percent in 2024-2032.

While Vietnam’s pepper export volume is the highest, its export price is the lowest. Vietnam’s black pepper is selling at $4,200-4,300 per ton, while Brazilian is $4,900 per ton. The figures are $4,703 and $4,700 per ton for Indonesia and Malaysia, respectively.

Similarly, Vietnam’s white pepper is priced at $6,000 per ton, or $1,300 lower than Malaysia’s and $232 lower than Indonesia’s.

Concerns

Hoang Thi Lien, chair of the Vietnam Pepper and Spice Association (VPSA), said:

“The supplies from both Vietnam and Brazil have decreased as a result of El Nino, which has pushed prices up."

Vietnam’s pepper export market has witnessed corrections with the appearance of new markets, including Pakistan, Germany, South Korea and India: which all have 3-digit growth rates.

At the same time last year, pepper was traded at just VND67,000 per kilogram, while it is now VND97,000, up 44.7 percent.

However, Lien said that the pepper production is facing challenges. Vietnam needs to improve pepper quality to satisfy requirements set by the US and EU.

It also needs to ensure supply sources by consolidating pepper growing areas. Vietnam’s pepper output is between VND170,000 and 190,000 a year. 

However, as the prices recently fell sharply, bottoming out at VND50,000 per kilogram, many farming households have chopped down pepper trees and shifted to other crops.

VPSA’s officers who visited growing areas last September heard from farmers that if pepper prices continue to stay at VND60,000-70,000, they will not continue farming, especially when durian and coffee prices have high profits.

“The coffee prices have far exceeded pepper prices, which was never seen before,” Lien commented.

She said that if Vietnam can maintain its pepper output, it be able to determine the prices in the market. Buyers now rush to seek supplies from Vietnam.

Lien hopes that agencies and local authorities will pay more attention to the development of pepper plants and support farmers to ensure output and stabilize production areas.

Vietnam’s pepper production areas have shrunk and output has decreased. Meanwhile, Brazil, a rival of Vietnam, is strengthening production to increase its output. 

“If Vietnam doesn’t have a reasonable strategy, Brazil will catch up with Vietnam in some years,” Lien said.

Tam An