Vietnam’s domestic pepper market has seen prices fall sharply to 136,000–140,000 VND/kg, well below the early June 2024 peak of over 200,000 VND/kg. Analysts point to a significant drop in Chinese imports of Vietnamese pepper as a key factor, alongside temporary shifts in global supply.
Domestic Prices Slide
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On August 7, surveys across key growing regions such as the Central Highlands and Southeast provinces showed prices down by 1,000–4,000 VND/kg from just days earlier:
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Central Highlands: Đắk Lắk pepper prices dropped 2,000 VND/kg to around 139,000 VND/kg; Gia Lai and Đắk Nông fell by 1,000–2,000 VND/kg, to 138,000–140,000 VND/kg.
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Southeast Region: Bà Rịa–Vũng Tàu, Đồng Nai, and Bình Phước saw a 3,000–4,000 VND/kg decline, down to 136,000–138,000 VND/kg.
Although current prices remain 55,000–60,000 VND/kg higher year-on-year, they have now retreated to their lowest levels in months.
China’s Sharp Import Decline
According to the Vietnam Pepper and Spice Association (VPSA), while major buyers such as the U.S., Europe, and India have sharply increased purchases, China’s demand has plunged.
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In the first half of 2024, China imported only 7,451 tonnes of Vietnamese pepper worth USD 20 million, a drop of 85.2% in volume and 81.7% in value year-on-year.
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China’s market share has fallen to 5.2%, compared to 33% during the same period last year.
This is a dramatic reversal from 2023, when China bought 55,000 tonnes of Vietnamese pepper.
Market Dynamics and Expert Insights
VPSA Chairwoman Hoàng Thị Liên explained that China may have stockpiled pepper last year, leading to reduced buying in 2024, compounded by the country’s economic slowdown.
However, Liên stressed that the global and domestic price drop is not solely due to China’s reduced demand. A short-term increase in supply—as farmers sold pepper during the May–June price peak—has also weighed on prices.
“For prices to rebound, we need stronger market demand. The U.S. and Europe already account for nearly 50% of Vietnam’s exports. If these markets don’t continue strong purchases later in the year, prices may struggle to climb back,” Liên noted.
Limited Global Supply May Support Prices
Even as Indonesia and Brazil begin their harvests, and Vietnam follows, Liên believes prices are unlikely to fall much further because global supply remains tight.
Industry experts agree that global pepper supply will remain constrained for the next 2–3 years:
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Vietnam, which supplies 40–50% of the world’s pepper, has seen planting areas shrink over recent years.
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New plantings require at least three years to produce harvestable pepper, preventing a rapid supply increase.
Outlook
While short-term prices face downward pressure, the underlying supply shortage suggests that long-term fundamentals remain strong. If global demand—particularly from the U.S. and Europe—holds steady, Vietnam’s pepper prices may stabilize and avoid deeper declines.