Coffee and pepper prices skyrocket

High demand in the world and domestic markets in early 2025 caused coffee prices to continuously increase, while pepper prices reached a 9-year high.

In the first days of 2025, the agricultural market in the Central Highlands provinces recorded positive fluctuations, especially the sharp increase in coffee and pepper prices. On January 8, domestic coffee prices increased by 300-500 VND per kg, to 120,300-121,000 VND. Of which, Dak Nong and Dak Lak recorded the highest coffee price of 121,000 VND per kg.

Not only coffee, pepper prices also increased, reaching 150,500 VND per kilogram - the highest level in 9 years, up 85% over the same period last year.

In the international market, prices of this agricultural product also increased simultaneously. On the New York floor, Arabica coffee prices increased by 0.57% to 0.67%, with the nearest delivery date in March 2025 reaching 7,070 USD per ton, up 40 USD. Robusta prices exceeded 5,000 USD per ton.

Pepper in the international market has exceeded 6,800 USD per ton for black pepper and nearly 9,000 USD per ton for white pepper.

Coffee at a garden house in Gia Lai. Photo: Duc Hoa

A representative of the Vietnam Coffee and Cocoa Association explained that the reason for the sharp price increase is a serious shortage of supply. Climate change and drought have reduced production, while crop conversion has also contributed to the high price.

Additionally, global conflicts have put pressure on supply chains, especially as farmers hold onto stocks waiting for better prices after the harvest.

As for pepper, supply from India has declined sharply due to climate change. Global pepper output in 2024 is forecast to reach 533,000 tons, down 10,000 tons from the previous year. In Vietnam, output will decrease by 20,000 tons to 170,000 tons. However, it is forecasted that in 2025, Vietnam's pepper output may recover to 200,000 tons, while India's is expected to decrease by 25-30% due to adverse weather.

Vietnam remains the world’s largest supplier of robusta coffee. Despite a 15% decline in coffee production in 2024 due to drought, average prices rose 57% to a record $4,037 a tonne. Coffee exports last year reached $5.5 billion, up 32% from the previous year.

Similarly, pepper exports in 2024 are expected to reach nearly US$1.4 billion, up 45.4% despite a 5.1% decrease in export volume. This growth is expected to continue, with domestic coffee prices likely to increase slightly due to the influence of the international market.

Source