Vietnam's average pepper export price in the first 8 months of 2024 was at 4,800 USD/ton, up 46.7% (reaching 1,527 USD/ton) over the same period last year.
Supply decreases, demand from China increases, domestic pepper prices bounce back
Drought in Espírito Santo (Brazil), which supplies more than half of Brazil’s black pepper production, has severely affected the country’s pepper harvest and the global market in general. The black pepper crop in the northern part of the state was halved due to high summer temperatures, and this situation continued into the fall and winter.
In Vietnam, due to prolonged drought in April and May in key pepper growing areas, Vietnam's 2025 harvest will be delayed. It is forecasted that the 2025 pepper crop will be harvested almost entirely in February, with many areas extending to March and April, 1 to 2 months later than previous years due to the impact of prolonged drought.
In the domestic market of Vietnam, the price of black pepper in the domestic market in August continued to decrease by 2.3 - 3.7%, down to 144,000 - 146,000 VND/kg. However, the market has recovered positively and increased by 3 - 3.8% (equivalent to 5,000 VND/kg) in the first 20 days of September, reaching 149,000 - 151,000 VND/kg.
Limited supply, while demand from Chinese market and the Middle East in early September were the main factors that caused domestic pepper prices in Vietnam to increase. In particular, demand from China has returned with large orders of 3,000 - 4,000 tons.
Figures released by the General Department of Customs show that, pepper export Vietnam's rice exports in August reached 19,420 tons, worth 116.7 billion USD, down 10.9% in volume and 10.1% in value compared to the previous month, and down 3.1% in volume but up 56% in value compared to the same period last year.
In the first 8 months, pepper exports reached 182,930 tons, worth nearly 878 million USD, down 2.7% in volume but still up sharply 41.8% in value compared to the same period last year thanks to high prices.
Vietnam's average pepper export price in the first 8 months of the year was at 4,800 USD/ton, up 46.7% (1,527 USD/ton) over the same period last year. In August alone, the average price reached 6,011 USD/ton, up 0.9% over the previous month and 61.1% over the same period.
In the structure of pepper export types in the first 8 months of the year, whole black pepper continued to account for a large proportion of up to 73.8%, reaching 135,620 tons. Next is ground black pepper reaching 25,699 tons, accounting for 14%; whole white pepper accounting for 7.7% with 14,975 tons; ground white pepper accounting for 3.8% and finally pickled pepper, black pepper, nail head pepper, green pepper, pink pepper... with 0.7%.
Vietnam's main pepper export markets in August and the first 8 months of the year included the US, Germany, UAE, India, China...
Of which, pepper exports to the US market reached a record 8,570 tons in August, worth 52.7 million USD, a sharp increase of 45.1% in volume and 52.4% in value compared to the previous month, and an increase of 90.6% in volume and 2.9 times in value compared to the same period last year.
In the first 8 months, the US led the consumption of Vietnamese pepper with a volume of 51,802 tons, worth 258.3 million USD, up 53.5% in volume and 90.9% in value compared to the same period in 2023. The market share of this market in Vietnam's total pepper exports also increased to 28.3% from 18% in the same period last year.
The amount of pepper exported to the next major markets also increased sharply in the first 8 months of the year such as: Germany reached 12,133 tons, up 97.5%; UAE: 11,779 tons, up 30.5%; India: 9,012 tons, up 11.8%...
In addition to the above markets, pepper exports to the Netherlands, South Korea, Pakistan, Russia, Egypt, the UK, Thailand, etc. also grew strongly at double-digit rates.
Among the major markets, only China recorded a decline. Specifically, according to data from the Vietnam Pepper and Spice Association (VPSA), Vietnam's pepper exports to the Chinese market in the first 8 months of this year reached only 8,388 tons, worth 23.5 million USD, down sharply by 84.4% in volume and 80.2% in value compared to the same period last year.
Pepper exports of enterprises all increased strongly by two to three digits.
A report by Phuoc Thinh Import Export Joint Stock Company (PTEXIM) in early September said that demand from the Chinese and Middle Eastern markets was the main factor causing pepper price Vietnam's domestic demand has increased. Especially, demand from China has returned with large orders of 3,000 - 4,000 tons.
“It appears that China’s inventories have been significantly reduced after a long period of reduced purchases, leading to large purchases to offset the raw material shortage as global pepper production is expected to continue to decline over the next few years,” PTEXIM’s report stated.
China's domestic pepper market also recorded a rapid increase, rising from 47 yuan/kg to 51 yuan/kg in just two days, an increase of 8.5% in a very short period of time. In addition, demand from the Middle East market after selling off cheap imported inventory at the beginning of this year was also very large, making the pepper market more vibrant.
With high pepper prices and favorable market conditions, Vietnam's pepper exports are likely to exceed US$1 billion this year. However, the amount of pepper exported from now until the end of the year may be lower than previous years because the export volume in the past 8 months has exceeded the output of 170,000 tons of the 2024 crop.
According to the Vietnam Pepper and Spice Association (VPSA), the inventory from the 2023 crop carried over plus the import volume in 2024 of about 40,000 - 45,000 tons (including informal imports) shows that the export source from August until the end of the year will be lower than every year and until March 2025 when the 2025 crop is expected to be harvested.
In the first 8 months of the year, most pepper exports of large enterprises increased sharply at double to triple digits compared to the same period last year. For example, Olam Vietnam reached 18,185 tons, up 50.6%; Phuc Sinh: 16,522 tons, up 61.7%; Nedspice Vietnam: 13,953 tons, up 14.1%; Haprosimex JSC: 13,808 tons, up 77% and Tran Chau: 11,426 tons, down 6.5%...
There are also a number of enterprises with sudden export growth such as Simexco Dak Lak increased by 215.1%; Sinh Loc Phat increased by 124.2%; Hanfimex Vietnam increased by 94.2%; Intimex Group increased by 85.6%; Lien Thanh increased by 60.3%...
VPSA statistics also show that VPSA enterprises exported 159,792 tons of pepper after the first 8 months of the year, up 35.6% over the same period and accounting for 87% of the country's total pepper exports. Meanwhile, enterprises outside VPSA only exported 23,964 tons, down 65.7% and accounting for 13%.
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