2025 // Week 8 – Vietnam Pepper Market Update – Beneficial From High Price
Current Price and Harvest Season
The current price of pepper in Vietnam ranges from 161,000 to 163,000 VND/kg. The harvest season has been ongoing for over two weeks, but newly harvested pepper has yet to significantly enter the market. Buyers are currently holding back, anticipating larger supply volumes that could potentially push prices down. This waiting game reflects a cautious approach among buyers, who are balancing the demand for pepper with the expectation of more favorable pricing conditions in the near future.
Domestic Market Trends
Several key trends are shaping the domestic pepper market in Vietnam:
- Rising Prices Post-Tet: Pepper prices have steadily increased in the two weeks following the Lunar New Year (Tet), providing a positive signal to farmers and encouraging them to invest more into their crops.
- Farmers’ Optimism: Motivated by the attractive prices, farmers are focusing on improving the quality of their pepper crops, aiming to capitalize on the favorable market conditions and increase their profitability.
- Regional Production Variations: Production levels vary across different regions. Bà Rịa – Vũng Tàu has seen an increase in production, while Đắk Nông has maintained stable levels. However, Đắk Lắk has experienced a slight decline due to adverse weather conditions, highlighting the vulnerability of pepper crops to climate-related challenges.
Supply & Export Outlook
The supply and export outlook for Vietnam’s pepper market presents a mixed scenario:
- Limited Domestic Supply: Lower inventory levels and restricted domestic supply are primary drivers behind the recent price increases, suggesting that demand is outpacing the available supply.
- Harvest Delays: Unfavorable weather conditions have caused harvest delays of approximately one month, further exacerbating the supply constraints and supporting higher prices.
- Strong Export Expectations: Despite the challenges, Vietnam’s 2025 pepper exports are projected to remain robust, benefiting from high prices and production declines in other key growing regions. This suggests that Vietnam is well-positioned to capitalize on the global demand for pepper, despite its own supply-side issues.
Global Market Insights
Insights from the global pepper market provide additional context:
- Cambodia: Pepper prices in Cambodia currently exceed 24,000 Riel/kg. Mak Ny, President of the Cambodian Pepper and Spice Federation, anticipates further price increases due to declining production and rising global demand, indicating a broader trend of supply constraints in the pepper market.
- International Pepper Community (IPC) Forecast: The IPC forecasts a 4% drop in global pepper production for 2025, equivalent to approximately 22,000 tons. Significant declines are expected in Vietnam and Brazil, the two largest exporters, suggesting a potential global supply shortage that could drive prices higher throughout the year.
Regional Impact in Vietnam:
Bà Rịa – Vũng Tàu
In Bà Rịa – Vũng Tàu, despite facing lower yields, farmers maintain a positive outlook due to the prevailing high prices. This resilience showcases the importance of market prices in sustaining farmers’ livelihoods and motivating continued production, even in the face of yield challenges. The high prices are offsetting the impact of lower yields, enabling farmers to remain profitable and optimistic about the future.
Châu Đức District
Châu Đức District has been significantly affected by severe weather conditions, leading to reduced productivity among local farmers. This situation underscores the vulnerability of pepper farming to climate-related risks and highlights the need for adaptive strategies to mitigate the impacts of adverse weather events. Farmers in this region face considerable challenges in maintaining production levels and income stability due to the unpredictable climate.
Factors Sustaining Price Increases
Limited Supply
Reduced domestic supply due to lower inventory levels is a primary driver of price increases. The scarcity of pepper in the market intensifies competition among buyers, pushing prices upwards.
Delayed Harvest
Unfavorable weather conditions have delayed the harvest by about a month, further constraining the available supply and contributing to the upward pressure on prices.
Strong Global Demand
Robust global demand for pepper, coupled with production declines in key growing regions, supports sustained price increases. The international market’s appetite for Vietnamese pepper remains strong, creating a favorable environment for exporters.
Conclusion
In conclusion, Vietnam’s pepper industry is currently benefiting from high prices, which are offsetting production challenges in some regions. The combination of limited supply, harvest delays, and strong global demand is expected to sustain price increases throughout 2025. Farmers in regions like Bà Rịa – Vũng Tàu remain positive due to the high prices, while those in Châu Đức District face challenges due to adverse weather conditions. Overall, the outlook for Vietnam’s pepper exports remains strong, supported by the favorable market dynamics. To ensure long-term sustainability, the industry should focus on mitigating climate-related risks and improving production efficiency to maintain its competitive edge in the global market.