In December 2023, the United States continued to be the primary export market for Vietnamese pepper, holding a 30.7% market share. Key markets for Vietnamese pepper included China market, the UAE, India, and China. Looking ahead to 2024, pepper exports are expected to be more favorable due to reduced production and the current inventory being at its lowest level in years.
China and the United States are the two main markets for Vietnamese pepper.
In December 2023, the United States continued to be the primary export market for Vietnamese pepper, holding a 30.7% export market share and reaching 6,212 tons, a 13.8% increase compared to the previous month. Following this were the UAE with 1,271 tons, China with 1,030 tons, and India with 1,011 tons.
Cumulatively in 2023, according to the Vietnam Pepper Association (VPSA), the country exported a total of 264,094 tons of various types of pepper, marking a 13.8% increase compared to 2022. The total export turnover reached 906.5 million USD, showing an 8.0% decrease. In this, black pepper contributed 770.6 million USD, while white pepper contributed 135.9 million USD.
Asia emerged as the largest export market for Vietnamese pepper in 2023, capturing 52.7% of the market share. Within Asia, China led the way with a 22.8% export market share, reaching 60,135 tons, a significant 174% increase compared to 2022.
The projected pepper inventory for the year 2024 is expected to be the lowest in recent years.
The anticipated inventory of pepper for the year 2024 is expected to be the lowest in recent years, according to the Vietnam Pepper Association. The association mentioned that the entire 2023 harvest has already been exported, with a portion of the exports sourced from both previous imports and inventory from the preceding year. The projected total volume of pepper exports for the entire year 2023 is estimated to reach 250,000 tons. Therefore, the carryover inventory from 2023 to 2024 is expected to be the lowest in many years.
As per the Vietnam Pepper Association, during the first 10 months of 2023, Vietnam exported a total of 223,578 tons of various types of pepper, with 200,571 tons of black pepper and 23,007 tons of white pepper. The total export turnover amounted to 750.8 million USD.
According to a report from the Ministry of Industry and Trade at the end of 2023, the prices of exported pepper in producing countries worldwide exhibited uneven fluctuations, decreasing in Indonesia, remaining stable in Malaysia, but experiencing significant increases in Brazil and Vietnam. In the domestic market, at the end of 2023, the price of black pepper increased sharply due to speculative buying amid limited supply. However, the upward trend in pepper prices is predicted to slow down as businesses exercise caution in purchasing for processing. As of December 27, 2023, the price of black pepper in the domestic market increased from 9,500 to 12,500 VND/kg (depending on the surveyed regions). The price of white pepper reached 112,000 VND/kg, significantly higher than the 93,000 VND/kg in the same period in 2022.
Vietnam needs to ensure the sustainable development of the pepper industry.
Assessing the Vietnamese pepper industry, the Vietnam Pepper Association (VPSA) asserts that, alongside challenges such as the reduction of cultivation areas due to competition with other crops, the sector is also confronted with new requirements from importing countries. Meeting these demands necessitates adequate preparation and adaptation from associations, businesses, and farmers.
Global pepper production for the 2024 season is estimated to decrease as forecasted reductions are observed across producing countries. However, according to VPSA, this decline is expected to be less significant than the global consumption decrease, making it challenging for pepper prices to rise consistently in the long term.
Therefore, VPSA advises businesses in the pepper industry to be prepared for these regulations. The upcoming requirements from the European Union include the origin of cultivation down to latitude and longitude, women and child rights, and buyer accountability in Europe.
VPSA notes a contradiction between the sustainable development of pepper and coffee and the sustainable cultivation of durian. The cultivation area code for durian requires dedicated cultivation, while many households in the Central Highlands are practicing mixed cropping with various crops such as pepper, durian, and coffee.
In response to the situation where many farmers are removing pepper plants to comply with the cultivation area code for durian export to China, VPSA recommends that the Ministry of Agriculture and Rural Development formulate appropriate solutions to ensure the sustainability of the Vietnamese pepper industry.
Black pepper in Vietnam is primarily cultivated in the Central Highlands (Tay Nguyen) and the Southeast region, accounting for over 93.5% of the country's total pepper cultivation area. Within this, the Central Highlands region holds 64%, with Dak Lak province alone boasting over 32,800 hectares of pepper cultivation and a production output of nearly 82,000 tons. This represents approximately 40% of the cultivation area and 43.3% of the total production in the entire Central Highlands region.