W11 Black Pepper Update: Global Pepper Production Expected to Decline in 2024

Published 2024년 3월 25일

In W11 in the black pepper landscape, global demand for pepper is estimated between 600 to 700 thousand mt annually. Asia consumes the majority, around 400 thousand mt, and the Americas and Europe rely heavily on imports to meet their consumption needs. Forecasts from the IPC suggest a 2% YoY decrease in global pepper production in 2024, with Vietnam and Brazil expecting declines due to various challenges. Despite this, the global pepper market showed stability on March 11, with prices holding steady across countries. In Vietnam, despite reduced productivity, pepper growers are experiencing a profitable harvest season, with prices reaching a five-year high of USD 3.83/kg, leading to substantial profits. However, Vietnam's pepper exports in Feb-24 decreased in volume and turnover compared to the previous year, although average export prices have increased.

Global Pepper Demand and Production Trends for 2024

The global demand for pepper ranges from 600 to 700 thousand metric tons (mt), with Asia being the largest consumer, accounting for 400 thousand mt. Half of this demand is fulfilled through imports, while the other half is produced locally. In the Americas, consumption is around 110 thousand mt, with the majority, 90 thousand mt, imported. Europe relies heavily on imports to meet its pepper consumption needs. However, forecasts from the International Pepper Association (IPC) suggest a 2% year-over-year (YoY) decrease in global pepper production in 2024. Top pepper producer Vietnam forecasts output to decrease to around 170 thousand mt, but exports are projected to reach approximately 240 thousand mt. Brazil's pepper output is also anticipated to decline significantly due to challenges related to climate change.

Global Pepper Prices Hold Steady on March 11, 2024

On March 11, the global pepper market showed no significant fluctuations in various countries. In Indonesia, the price of Lampung black pepper held steady at USD 3,992/mt. Similarly, Malaysia's Kuching black pepper ASTA maintained its price at USD 4,900/mt. In Brazil, the black pepper ASTA 570 price remained unchanged at USD 4,400/mt. Vietnam reported steady export prices for black pepper grades 500 and 550 grams per liter (g/l) at USD 4,100 and USD 4,200/mt, respectively.

Meanwhile, the domestic pepper market in Vietnam showed price stability on March 11 across various regions. In Đắk Lắk and Đắk Nông, pepper traded at USD 3.81 per kilogram (VND 94,500/kg), while in Gia Lai and Đồng Nai, prices remained at USD 3.73/kg (VND 92,500/kg). Bà Rịa–Vũng Tàu reported prices of USD 3.83/kg (VND 95,000/kg), and in Bình Phước, traders continued to buy at USD 3.81/kg (VND 94,500/kg), with no changes observed from the previous day. However, on March 13, there were changes in the domestic pepper market in Vietnam. Pepper in Đắk Lắk and Đắk Nông traded at USD 3.85/kg (VND 95,500/kg), while prices in Gia Lai and Đồng Nai remained stable at USD 3.73/kg (VND 92,500/kg). Bà Rịa–Vũng Tàu maintained prices at USD 3.83/kg (VND 95,000/kg), and traders in Bình Phước continued to buy at USD 3.81/kg (VND 94,500/kg).

Vietnam Pepper Growers Profit from Surging Prices

Vietnam pepper growers are experiencing a profitable harvest season despite reduced productivity due to a significant price surge. With pepper prices reaching USD 3.83/kg (VND 95,000/kg), up 36% YoY and the highest in five years, growers in regions like Đồng Nai, Bình Phước, Đắk Lắk, and Gia Lai are reaping substantial profits. The Ministry of Agriculture and Rural Development attributes the price surge to reduced output, with this year's yield per hectare (ha) dropping to 4 to 5.5 mt compared to the previous 7 to 8 mt due to decreased care. Despite lower productivity, the booming prices ensured significant returns for Vietnamese pepper growers this season.

Vietnam's Pepper Exports Dip in Volume but Prices Increased in Feb-24

According to the Vietnam Pepper and Spice Association (VPSA), Vietnam exported 31,133 mt of pepper as of the end of Feb-24, generating nearly USD 125 million in revenue. This marked a decrease of 23.7% YoY in export volume and a 2.9% YoY decrease in turnover. However, the average export prices for black and white pepper increased YoY by 13.9% and 8.1%, respectively, with black pepper averaging USD 3,840/mt and white pepper at USD 5,459/mt.