W13 Black Pepper Update: Global Pepper Prices Maintained Stability Amidst Regional Fluctuations, Vietnam Forecasts Lowest Production in Recent Year

Published 2024년 4월 6일

In W13 in the black pepper landscape, global pepper prices remained stable in W12 but saw slight fluctuations in Indonesia. Vietnam, the world's largest pepper producer, is projected to experience a 10% YoY decline in production in 2024, particularly in Đắk Nông province, despite positive shifts towards sustainable farming practices. Vietnam's pepper prices have been steadily rising in 2024, with the Central Highlands contributing significantly to cultivation. Moreover, global prices are expected to stay high due to increased demand and limited supply from major producers.

High Global Pepper Prices Expected in 2024 Due to Supply Shortage

According to the Vietnamese Import-Export Department, pepper prices in producing countries will remain high in 2024 due to increased demand, exacerbated by insufficient supply from major producers like Indonesia, Brazil, Malaysia, and Cambodia. This scarcity fails to compensate for reduced exports from Vietnam, leading to elevated global prices. Notably, consumers worldwide demonstrate a willingness to pay premiums for high-quality pepper. Markets such as the United States (US), the European Union (EU), and the Middle East seek more sustainably sourced products across social, environmental, and economic dimensions. Furthermore, with Brazil concluding its harvest season, Vietnam beginning its harvest, and Indonesia and Malaysia scheduled for their main harvest in July, the global pepper market dynamics are undergoing significant shifts. Despite traditionally holding a 60% export market share, Vietnam experienced a sharp decline in export volumes during the first two months of 2024.

Global Pepper Prices Show Stability with Some Fluctuations in W13

On March 25, global pepper prices remained unchanged across various countries. In Indonesia, the price of Lampung black pepper was reported at USD 4,305 per metric ton (mt), while Malaysia's Kuching black pepper ASTA maintained at USD 4,900/mt. Similarly, the price of black pepper ASTA 570 in Brazil remained unchanged at USD 4,375/mt. Vietnam reported steady export prices for black pepper grades 500 and 550 grams per liter (g/l) at USD 4,200/mt and USD 4,300/mt, respectively. However, on March 26, the price of Lampung black pepper in Indonesia saw a sharp increase of 3.13%, reaching USD 4,413/mt, while prices in other countries remained unchanged. On March 29, global pepper prices experienced a slight decrease in Indonesia but remained steady in other countries, with the price of Lampung black pepper decreasing by 0.14% to about USD 4,391/mt.

Vietnam Faces Lowest Pepper Output in Recent Years

According to the Vietnam Pepper Association (VPA), Vietnam contributes approximately 50% of the global pepper output. However, due to a significant decrease in cultivation area, the country's pepper production in 2024 is projected to reach its lowest level in recent years. VPSA forecasts a 10% year-on-year (YoY) decline in Vietnam's pepper output to 170 thousand mt, marking the lowest level in the past five years. Đắk Nông province contributes 41.2% of the total, followed by Đắk Lắk with 28.2%, Gia Lai with 7.6%, and Ba Ria Vung Tau with 7.1%.

Currently, Vietnam has 100 thousand pepper farmers, 200 export enterprises, and 35 pepper factories. In Đắk Nông province alone, there are 34 thousand ha of pepper cultivation, yielding nearly 70 thousand mt. Recent years have seen positive changes in pepper farming, with a shift towards organic and ecologically diverse cultivation practices. The association is also witnessing an expansion in quality certification and product consumption contracts. As of 2023, Đắk Nông province has 23 establishments and models implementing production standards across more than 3 thousand hectares (ha).

Vietnam Sees Rising Pepper Prices in 2024 Harvest Season

In 2024, pepper prices in Vietnam showed a consistent upward trend, ranging from USD 3.70 to 3.84 per kilogram (VND 92,500 to 96,000/kg). The Central Highlands accounts for approximately 60% of the country's pepper cultivation area spread across over 70 thousand ha, with Đắk Lắk province alone contributing about 40.8%. The anticipated favorable conditions for the 2024 pepper harvest season in Đắk Lắk province and rising prices, present promising prospects for sustainable pepper development. Notably, pepper prices reached nearly USD 9.20/kg (VND 230,000/kg) during the peak period of 2014 to 2017. However, pepper prices fluctuated over the past decade, hitting a low of USD 1.36/kg (VND 34,000/kg) in Mar-20.