Decoding the reasons for the plummeting pepper prices

Domestic pepper price today

Pepper price today December 5, 2024, the price situation continues to plummet compared to yesterday December 4, 2024; average only at 140,600 VND/kg, many localities have decreased sharply.

Accordingly, pepper price today, December 5, 2024, Gia Lai province decreased by 500 VND/kg; Ba Ria - Vung Tau, Dak Lak both decreased by 1,000 VND/kg; Dak Nong decreased by 1,500 VND/kg, only Binh Phuoc decreased the most at 2,000 VND/kg.

Specifically, pepper prices in Gia Lai and Binh Phuoc are both at 140,000 VND/kg; pepper prices in Ba Ria - Vung Tau, Dak Lak and Dak Nong are all at 141,000 VND/kg. The average pepper price today, December 5, 2024, is at 140,600 VND/kg, a sharp decrease of 1,200 VND/kg.

Pepper price today December 5, 2024 continues to decrease sharply. Photo: Le Son

Since the beginning of the week, pepper prices have dropped sharply. However, with low inventories and high export demand, pepper prices are expected to recover in the coming time. Farmers and businesses need to proactively adapt to market fluctuations to ensure economic efficiency.

According to the assessment, the reason for the decrease in domestic pepper prices is due to the impact of many factors such as the sharp decrease in coffee prices, which has led to a decrease in pepper prices due to the connection between the two agricultural products; Locally increased supply: Some agents and farmers sold off their inventories before the end of the year, causing pressure to reduce prices; Climate change: Unfavorable weather conditions in some pepper growing areas have affected quality and output, causing the market to become unstable.

Pepper prices in the Central Highlands and the Southeast have both dropped sharply, especially in Gia Lai and Dak Lak with the deepest drop of VND5,000/kg. Despite the drop in pepper prices, pepper export demand remains high, especially from the US and EU markets.

Vietnam’s pepper industry is currently facing many challenges, including climate change, shrinking acreage, investment costs in irrigation and disease prevention to maintain productivity, which have significantly affected its competitiveness. Currently, the country has more than 115,000 hectares of pepper and spice crops, mostly concentrated in the South Central Coast – Central Highlands region with more than 75,300 hectares.

Many experts believe that pepper is entering a price increase cycle due to tight supply. Currently, the majority of the goods are in the hands of a small number of agents and import-export companies. This could lead to significant fluctuations in the market in the coming time.

According to Ms. Hoang Thi Lien, Chairwoman of the Vietnam Pepper and Spice Association (VPSA), in the last two months of 2024, Vietnam is expected to export 50,000 tons of pepper, earning about 300 million USD. Looking towards 2025, the pepper and spice industry will focus on supporting farmers, cooperatives and businesses to meet international standards on food quality and safety. This is part of a long-term strategy to increase product value, expand markets and enhance the position of Vietnamese pepper in the world market.

The recent fluctuations in pepper prices show the complexity and challenges that the Vietnamese pepper industry is facing. To adapt to market changes and ensure sustainable development, the industry needs comprehensive solutions, from improving product quality to diversifying markets and building brands.

Pepper price update today 12/5/2024

World pepper price today

Update on world pepper prices from the International Pepper Community (IPC), at the end of the most recent trading session, the market was basically stable compared to the previous update, except for the Indonesian market with slight fluctuations.

Specifically, IPC listed the price of Indonesian Lampung black pepper at 6,679 USD/ton; up 0.78%; the price of Muntok white pepper at 9,115 USD/ton, down slightly 0.31%.

The price of Brazilian ASTA 570 black pepper was stable at 6,150 USD/ton; the price of Malaysian ASTA black pepper was at 8,300 USD/ton, down 1.2%; the price of this country's ASTA white pepper reached 10,500 USD/ton.

Of which, the price of Vietnamese black pepper is stable at 6,200 USD/ton for 500 g/l, 550 g/l remains at 6,500 USD/ton; the price of white pepper is at 9,400 USD/ton, unchanged.

World pepper prices today, December 5, 2024, are basically stable, with insignificant increases/decreases. Photo: Hoang Thien

According to the assessment, the reasons for the decrease in world pepper prices are: Increased supply in Indonesia and Brazil: Favorable crop season in Indonesia and high output in Brazil have increased global supply, causing downward pressure on prices; Fluctuations in the Chinese market: Import demand from China has decreased sharply due to new regulations on quality control and food safety; Impact from international policies: The European Union's anti-deforestation regulations (EUDR) have caused market sentiment to be unstable, affecting global pepper prices.

Vietnam has exported about 237,000 tons of pepper in the first 11 months of 2024, but the lowest inventory in the past 6-8 years could cause pepper prices to fluctuate strongly in the coming time.

The 2025 harvest is expected to be delayed by 1.5 to 2 months due to the impact of climate change, starting late around February 2025. This will put great pressure on raw pepper supply in the first quarter of 2025, when demand continues to increase but supply is insufficient to meet demand.

In India, pepper harvesting was conducted amid unfavorable weather conditions, which reduced yields. In contrast, Indonesia recorded a better season in areas such as Lampung, Bengkulu, and South Sumatra with good yields. Meanwhile, Brazil faced selling pressure due to strong shipments from Para and Espirito Santo, although dry weather early in the season also affected quality and overall yields.