In the first 2 months of 2024, Vietnam’s average pepper export price is estimated to reach 4,041 USD/ton, up 28.7% over the same period in 2023.
According to the Ministry of Agriculture and Rural Development, in the first 2 months of 2024, pepper exports reached 35,000 tons with a value of 143 million USD, down 12.3% in volume but up 12.9% in value.
Vietnam’s largest pepper consumption market is the US with a proportion of 29%, followed by India 8%, Germany 6%… In total, in the first 2 months of 2024, the average export price of Vietnam’s pepper is estimated to reached 4,041 USD/ton, up 28.7% over the same period in 2023.
The increase in export pepper prices also causes domestic pepper prices to continuously increase. In particular, pepper prices have continuously broken out since the 2024 Lunar New Year. Domestically, the pepper market on March 5 increased by 500 VND/kg in some places compared to yesterday. Pepper is traded from 93,000 – 96,000 VND/kg depending on locality.
Mr. Hoang Phuoc Binh – Permanent Vice Chairman and General Secretary of the Chu Se Pepper Association (Gia Lai), said the main reason causing high pepper prices is the supply and demand factor.
The biggest impact causes pepper prices to increase rapidly because the harvest is starting so the volume is not much. Meanwhile, domestic speculators are focusing on buying a lot, because they predict that pepper will begin a multi-year price increase cycle (usually lasting 10 years).
At the same time, pepper growers do not have great pressure to sell, because most pepper growers currently grow durian, coffee or have other income.
In addition, increased demand from different markets such as the US, EU, Asia and Africa for spot orders in the first quarter of 2024 is also one of the reasons driving pepper prices to increase sharply.
According to experts, the current high price of pepper makes it difficult for businesses to export, especially previously signed orders.
The Vietnam Pepper and Spice Association (VPSA) forecasts that Vietnam’s pepper output in 2024 will decrease by about 10 – 15% to 160,000 – 170,000 tons.
Among countries with large pepper production, Brazil has passed the harvest season, Vietnam has entered the harvest season, while the main harvest of Indonesia and Malaysia is in July every year.
While supplies from Indonesia, Brazil, Malaysia, and Cambodia do not sufficiently compensate for Vietnam’s reduced export volume, pepper prices will increase sharply right from the beginning of the season.
It is forecasted that the global pepper market will be vibrant. According to the Vietnam Pepper and Spice Association, after the Lunar New Year, it is the time when Chinese traders increase their purchasing power of pepper in the market, especially is the beginning of the second quarter of every year.
Other markets will also begin to increase purchases again, causing inventories to continue to decrease, which will continue to support domestic pepper prices.
According to the Import-Export Department (Ministry of Industry and Trade), it is forecasted that global pepper prices will fluctuate in an upward trend in the first quarter of 2024 due to output continuing to decrease in main producing countries.
Adverse weather conditions caused by the El Nino phenomenon are affecting pepper productivity and harvest.
Looking back at the history of the pepper market, it has gone through many cycles of ups and downs in prices, and the most recent cycle shows that the price upswing cycle of pepper usually lasts from 8 to 10 years and it is predicted that the price will reach its peak and will higher than that of the previous cycle (in 2015, pepper peaked at a price of more than 250,000 VND/kg), Mr. Hoang Phuoc Binh commented.
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According to VNA/Vietnam+
