Global Supply Shortages Could Push Pepper Prices Higher

Vietnamese pepper prices are set to rise in 2025 as global production continues to fall. The Việt Nam Pepper and Spice Association (VPSA) highlights steady demand from major markets like the US and Europe, while China is expected to resume purchasing Vietnamese pepper after the Lunar New Year.

According to the International Pepper Community (IPC), global pepper production dropped by 4% in 2024, equating to a 22,000-tonne shortfall compared to 2023. Lower yields in Brazil and Việt Nam, driven by climate challenges and higher production costs, were key factors behind this decline.

Vietnamese Pepper Exports in 2024

In 2024, Việt Nam exported 250,600 tonnes of pepper, generating over USD 1.3 billion in revenue. Black pepper made up the lion's share, contributing USD 1.1 billion, while white pepper added another USD 200 million.

Although export volumes decreased by 5.1%, the value jumped by an impressive 45.4%, thanks to higher prices.

Key export destinations included:

• US: Imported 72,311 tonnes, representing 28.9% of total exports, a 33.2% increase from 2023.
• UAE, Germany, Netherlands, and India: Continued to show strong demand.

China's Buying Trends

China’s pepper imports from Việt Nam plummeted by 82.4% in 2024 due to an economic slowdown and a preference for cheaper imports from Indonesia. However, with inventories now running low, China is expected to ramp up purchases as Việt Nam's main harvest begins in the spring of 2025.

US Demand Shows Mixed Signals

The US surprised the market in 2024 by increasing its pepper imports by 40%. Buyers stocked up, anticipating higher prices in the future. For 2025, US demand may cool off slightly due to high inventory levels from last year’s aggressive purchasing.

Price Trends in 2025

Pepper prices in 2025 are expected to stay strong, supported by:

1. Stable demand from major markets like the US and Europe.
2. Lower production levels in top pepper-producing countries.
3. China’s return to buying Vietnamese pepper during the main harvest season.

However, competition from other exporting nations and uncertainties in the global economy could influence price trends.

Strategies for Vietnamese Exporters

To thrive in this uncertain market, businesses should:

• Keep a close eye on global trends to fine-tune procurement and stock strategies.
• Manage cash flow effectively to handle fluctuations in export volumes and revenue.
• Diversify export markets to reduce reliance on any single buyer.

By staying agile and responsive, Vietnamese pepper exporters can take advantage of opportunities while navigating the challenges of 2025.





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