2025 // Week 4 – Vietnam Pepper Market Outlook: Global Production Declines and Price Stability
Vietnam Pepper Market Overview: Domestic Prices
Domestic pepper prices in Vietnam ranging between 149,000 – 150,000 VND/kg same as last week, which remained relatively stable during the last three months of 2024. Compared to the beginning of the year, domestic black pepper prices rose by 75.6% and white pepper prices increased by 68.8% compared to the beginning of the year. Similarly, export prices increased by 30.7% for black pepper and 28.6% for white pepper.
This upward trend in export prices is attributed to the increasing global demand for pepper, particularly in major markets like the U.S. and Europe.
Global Pepper Production: A Continued Downward Trend
The Vietnam Pepper and Spice Association ( VPSA) reported in its last meeting that global pepper production is projected to decline for the fourth consecutive year in 2025, following a downward trend that began in 2022. This decline is primarily attributed to farmers shifting towards more profitable crops, such as durian, coffee, and oil palm. Furthermore, the impact of climate change and extreme weather events has resulted in reduced yields and increased production costs.
*Climate change and extreme weather events: These factors have reduced yields and increased production costs. Rising temperatures, unpredictable rainfall patterns, and increased frequency of droughts have significantly impacted pepper-growing regions. In some areas, crop losses have reached up to 30% due to climate-related challenges, forcing farmers to invest more in irrigation and crop protection.
China’s Pepper Market: Reduced Imports and Stable Prices
China’s pepper import patterns have shifted significantly. In 2024, China reduced its pepper imports from Vietnam by 82.4% while increasing imports from Indonesia by 76.8%. However, this increase was insufficient to meet China’s total consumption needs. Despite expectations of price reductions, pepper prices in China have remained stable at 140,000 VND/kg over the past three months.
The Chinese market is characterized by low pepper inventories and a projected wait for Vietnam’s main harvest season (after the Lunar New Year) to resume purchases.
Regional Pepper Market Dynamics
The pepper market exhibits regional variations in prices and demand. In India, pepper prices have remained stable both domestically and internationally. Despite the Indonesian Rupiah weakening against the U.S. dollar, Indonesia has experienced positive trends in both domestic and international pepper prices. In Vietnam, domestic pepper prices remained stable during the last three months of 2024, averaging 140,000–150,000 VND/kg.
Pepper Price Trends: Stable Domestic Prices and Rising Exports
In Vietnam, domestic black pepper prices rose by 75.6% and white pepper prices increased by 68.8% compared to the beginning of the year. Similarly, export prices increased by 30.7% for black pepper and 28.6% for white pepper.
This upward trend in export prices is attributed to the increasing global demand for pepper, particularly in major markets like the U.S. and Europe.
Future Outlook: High Prices and Stable Demand
The VPSA anticipates that global pepper prices will remain high in 2025 due to declining supply. Demand in major markets like the U.S. and Europe is expected to remain stable, driven by the ongoing demand for pepper in the food and spice processing industries.
While the market faces challenges, such as climate change and shifting agricultural practices, the continued demand for pepper as a flavor enhancer and ingredient in various cuisines suggests a strong future for the pepper market.