Pepper prices expected to keep rising
Pepper prices expected to keep rising
The price of Vietnamese pepper is expected to continue increasing in 2025 due to a global supply decline, while demand in major markets such as the US and Europe remains stable and China may start purchasing pepper from Việt Nam after the Lunar New Year.
Industry insiders said as much at the annual meeting of the Việt Nam Pepper and Spice Association (VPSA) in HCM City late last week.
According to the International Pepper Community (IPC), global pepper production in 2024 decreased by about 4 per cent (22,000 tonnes) compared to 2023, mainly due to a decline in production in Brazil and Việt Nam.
The IPC forecasts that global pepper production in 2025 will continue to decline, due in part to the lower economic efficiency of pepper compared to other crops, leading many farmers to no longer choose pepper as a primary crop. Climate change has also reduced pepper yields, while production costs have risen significantly.
Hoàng Thị Liên, chairwoman of VPSA, said that last year, Việt Nam exported 250,600 tonnes of pepper of all kinds worth a total value of more than US$1.3 billion, with exports of black pepper accounting for $1.1 billion and white pepper $200 million.
Although the pepper export volume in 2024 decreased by 5.1 per cent compared to 2023, the export value surged by 45.4 per cent thanks to a substantial increase in export prices, she said.
The US was Việt Nam's largest pepper export market in 2024, with 72,311 tonnes accounting for 28.9 per cent of the total, marking a 33.2 per cent increase from 2023. The US was followed by the UAE, Germany, the Netherlands and India, she said.
Hồ Trí Nhuận, director of Gohan Co., Ltd., said that in 2024, demand for pepper in the US market was initially expected to grow by only 5 per cent. However, due to concerns over rising prices, importers started stockpiling, increasing their purchases by up to 40 per cent.
He noted that based on assessments of supply and demand, pepper exports in 2025 were expected to face both opportunities and uncertainties.
Stable market demand and reduced output in some regions would help maintain high pepper prices. However, the extent of price increases would depend on the purchasing pace of key markets like the US and China, he said.
Việt Nam’s pepper exports to China decreased by 82.4 per cent last year. This was attributed to China's economic slowdown in the early months of the year, leading to reduced consumer spending, the association said.
At the same time, China increased its purchases from other countries, such as Indonesia, due to more competitive prices compared to Việt Nam.
However, the VPSA noted pepper inventory in China was now at a low level, and the market would likely increase its purchases again.
According to Nhuận, pepper prices in 2025 are expected to rise further. However, the pace of the increase—whether fast or slow—remains uncertain due to a variety of potential factors.
Nhuận said China was expected to increase its purchases as soon as Việt Nam begins its main harvest season this spring, while the US might buy at a slower pace due to high inventory levels carried over from 2024.
Vietnamese pepper would also face competitive pressure from other pepper-producing countries.
Businesses needed to closely monitor market trends and purchases from partners to develop appropriate plans for procurement, stockpiling and cash flow management. This approach would help increase export volumes and revenues while ensuring business efficiency, he added.
