Domestic Price Surge: A Response to Supply Uncertainty

The recent upward trajectory in domestic pepper prices is a direct reflection of heightened supply concerns. The market has witnessed a notable increase, with prices reaching an unprecedented range this week. This surge is primarily fueled by the severe and prolonged flooding in Vietnam’s Central and Central Highlands regions, which are critical areas for pepper cultivation. The specter of damaged crops and potential yield reductions in the upcoming harvest has led to an immediate market reaction, pushing prices higher as traders anticipate tighter supply. This situation underscores the delicate balance between environmental factors and commodity market stability.

Pepper price developments in the Central Highlands and Southeast from First 2023 to Nov 24, 2025(Unit: VND/kg)

Devastating Floods: Impact on Agriculture and Human Life

Humanitarian Crisis

The prolonged flooding has caused at least 102 deaths and missing persons, highlighting the severe human cost of this natural disaster.

Economic Catastrophe

Preliminary economic losses are estimated at a staggering 13,078 billion VND.

Đắk Lắk, a vital agricultural province, has suffered the most significant damage, accounting for 5,330 billion VND of the total losses.

The Central and Central Highlands regions of Vietnam have been ravaged by severe and prolonged flooding, leading to a tragic loss of life and extensive economic damage. The Department of Dyke Management and Disaster Prevention (Ministry of Agriculture & Environment) reports a grim toll of at least 102 deaths and missing persons, underscoring the immense human impact of this disaster. Economically, preliminary estimates place the losses at an astounding 13,078 billion VND, with Đắk Lắk province bearing the brunt of the devastation. Hundreds of hectares of vital crops, including both coffee and pepper, have been severely damaged or completely destroyed, raising serious alarms about agricultural output in the coming seasons.

The National Center for Hydrometeorological Forecasting warns that heavy rainfall is expected to persist in key regions until November 25th, including Hue, Da Nang, and eastern Quang Ngai. This continued precipitation poses an acute threat to the already vulnerable pepper crops.

The extended period of adverse weather introduces significant uncertainty into the 2024 pepper harvest, which typically begins around February–March after the Lunar New Year. The impact of climate change has already partially affected farmers’ productivity this year, and the ongoing flooding further compounds these challenges, creating a precarious outlook for the industry.

The scene of water surrounding the flood center of Hoa Thinh, Dak Lak.

Market Dynamics: Supply Pressure Meets Export Opportunities

The Vietnamese pepper market is at a critical juncture, balancing severe domestic supply pressures with emerging international opportunities. The prolonged heavy rains are undeniably threatening the output of the new crop, pushing prices upwards and creating a challenging environment for local producers and traders.

However, amidst these difficulties, a significant positive signal has emerged from the international arena: the U.S. decision to exempt tariffs on several imported products from Vietnam. This development is particularly crucial for the pepper industry, as the U.S. represents one of Vietnam’s most important pepper-consuming markets.

Positive Export Outlook

• U.S. tariff exemption fosters optimism for increased trade.
• Potential for stronger demand from a key market.
• Opportunity for Vietnamese exporters to recover market share.

Overall Market View

This dual dynamic suggests a complex but potentially resilient market. While domestic supply constraints will likely maintain upward price pressure, the improved access to the U.S. market could provide a much-needed boost for exporters, potentially leading to a recovery in overall market value for Vietnam’s pepper industry.