Will pepper prices still stay high in the near future?

 
Although there is a downward adjustment, pepper prices are expected to remain at a high level in the near future.

In a recent report, the Import-Export Department (Ministry of Industry and Trade) forecasts that pepper prices in producing countries will continue to remain high due to increased demand, while supply from producing countries Indonesia, Brazil, Malaysia and Cambodia are not enough to compensate for the decrease in exports from Vietnam.

Currently, consumers around the world are willing to pay high prices for high quality pepper. In particular, the US, EU, Middle East markets... increase the need to import products that meet sustainability in social, environmental and economic aspects throughout the supply chain.

Meanwhile, in countries with large pepper production, Brazil has passed the harvest season, Vietnam has entered the season, while the main harvest of Indonesia and Malaysia is in July every year.

Information from the Vietnam Pepper and Spice Association (VPSA), speculation is the main reason leading to the "hot" increase in pepper prices. Vietnam's harvest is in its main season, so the phenomenon of hoarding goods pushing up prices will not likely happen in the near future.

However, pepper prices are forecast to remain high. This year, the harvest was early due to the hot weather coming early due to El Nino. Harvest is expected to end at the end of March. The actual output is lower than VPSA's expectation, estimated at only 140-150 thousand tons.

According to VPSA, Vietnam provides about 50% of global pepper output, but due to a sharp decline in area, Vietnam's pepper output in 2024 may be at its lowest level in many years.

According to Nedspice Group, the scale and timing of new export demand in Vietnam will determine the price trend in the coming months, especially China plays an important role.

Nedspice Group forecasts global pepper production to reach about 465,000 tons in 2024, down 6,000 tons compared to the previous year. In addition, global pepper consumption is expected to be at 529,000 tons, 64,000 tons higher than production. This caused inventory to drop to its lowest level in the past 6 years.

Vietnam's harvest this year according to Nedspice is about 157,000 tons, down 15% compared to the previous year. In recent years, there has been very little new pepper planting in Vietnam and many old trees. At the same time, the area of ​​pepper trees is also shrinking and being replaced by crops that bring better income such as durian.

Nedspice believes that rising pepper prices will encourage farmers to increase production, boosting pepper productivity in the coming years. However, new planting will take time to harvest, so output is unlikely to recover soon.

Pepper productivity decreased sharply due to prolonged drought and disease

 

Prolonged drought, along with many diseases, caused pepper productivity in Kien Giang to decrease sharply, and farmers were less happy because the pepper crop failed.

Pepper prices are rising again after a long period of low levels. Currently, traders are buying at the garden for 95,000 VND/kg, an increase of nearly 30,000 VND/kg compared to the end of 2023. Although prices have increased, many households grow them. Pepper in Kien Giang is still not happy because this year's pepper crop failed and the harvest yield was low.

Mr. Thach Nat, a  longtime pepper grower  in Ha Tien City, said: "Each pepper planting post, if the weather is favorable and well cared for, can yield from 800g to 1kg. However, this year the harvest only reached less than 500g/head. The reason is due to prolonged drought and lack of irrigation water, pepper plants do not develop well and bear little fruit."

As the owner of a pepper purchasing and processing facility in a commune on the outskirts of Ha Tien City, Mr. Ngo Hoang Du said: "It is now the harvest season but each day the facility can only purchase a few dozen kilograms of raw pepper. Because this year's pepper crop was poor, farmers harvested low yields. Furthermore, because pepper prices are increasing, there are households who are not in a hurry to sell right away but wait for the price."

Mr. Tran Quang Giau, Director of the Department of Crop Production and Plant Protection of Kien Giang province, said that currently the whole province only has about 384 hectares of pepper growing, scattered in the districts of Giong Rieng, Go Quao, U Minh Thuong, Kien Luong, Kien Hai, Ha Tien City and Phu Quoc.

Recently, because pepper prices are low while input costs are increasing, the more they grow, the more they lose money, so farmers destroy pepper gardens and switch to other crops. In addition, many pepper gardens in Go Quao, Giong Rieng, Phu Quoc are infected with diseases, commonly slow death, quick death, crazy pepper, nematodes with a total area of ​​more than 26 hectares, affecting harvest output.

Will pepper prices still go up in the near future?

 

At the Vietnam Pepper and Spice Industry International Conference - VIPO 2024 held on March 8-10, Mr. Jasvinder Singh, Sethi, CEO and Founder of Namagro Vietnam, said that global consumption demand is about 600,000 – 700,000 tons.

This demand is met through imports and self-cultivation in the country. Asia consumes the most pepper in the world with 400,000 tonnes, of which half is imported, half is self-produced. The Americas consumed 110,000 tons, of which 90,000 were imported from other countries, while Europe imported almost all.

In terms of supply, he cited forecasts from the International Pepper Association (IPC) that said worldwide pepper production will decline by about 2% in 2024.

Not out of the trend, Vietnam's pepper production may decrease to about 170,000 tons, but exports can still reach about 240,000 tons. Brazil's output will fall more sharply due to climate change-related issues.

According to CEO Namagro Vietnam, two important factors to evaluate output are yield and harvested area.

Productivity depends on the weather and the motivation of the farmer himself. If farmers believe that pepper cultivation is profitable, they will take care of it and improve yields. However, low prices in recent years, coupled with expensive input costs, have left farmers with little incentive to persist in their pursuit of pepper.

In Vietnam, since 2017, no new planting areas have appeared, besides there are also situations in some areas, farmers switch to planting other crops.

All of this will cause supply shortages in the future. In addition, El Niño, La Nina phenomena and geopolitical instability exacerbate the situation.

For the pepper market, Jasvinder Singh Sethi also noted that it is not simply assessing supply and demand, but also assessing whether geopolitical conflicts of a region affect the supply and demand of that area and its vicinity.

In terms of prices, by compiling data, he observed that there is a rule that repeats three times in the past 50 years, that every time demand is greater than supply, prices also skyrocket, whereas when supply is greater than demand, prices will fall and remain at the bottom.

Pepper prices are currently stable and may likely increase in the near future. Supply is still not able to meet demand.

"Unlike turmeric or ginger, prices go up every year, farms grow more and the next year prices fall again, pepper needs another 3-4 years to ensure supply due to the shortage of planting area that appeared three years ago. Existing growing areas also face issues related to climate change but long-term demand for pepper remains strong," he said.

Pepper prices in the domestic market are continuing their upward trend in the first months of the year. In just three months (from December 2023), pepper prices have increased by up to 30%. By the end of February, the price of black pepper increased by 10,000 – 11,000 VND/kg compared to the end of January to 91,000 – 94,000 VND/kg. The highest threshold recorded in March was 96,000 VND/kg.

According to some businesses and experts in the pepper industry, in recentyears, pepper prices in many countries such as Brazil and Indonesia are often higher than Vietnam, even at one time Indonesia did not have pepper to export.

In fact, at this time, only Vietnam is harvesting a lot. World prices are higher than domestic, adding to the fear of lack of goods and price increases, so many businesses actively increase the amount of purchases, pushing pepper prices up hot.

According to information from the Vietnam Pepper and Spice Association (VPSA), Vietnam supplies about 50% of global pepper production, but due to a sharp decline in area, Vietnam's pepper production in 2024 is likely to be at the lowest level in many years.  

Vietnam pepper market update 11th March 2024 – Week 10

We would like to send you a quick highlight Vietnam pepper market update 11th March 2024 – Week 10.

Last week, the price of pepper has some downward adjustments as it is currently the main harvesting season, leading to a more abundant supply. The price of pepper has decreased from 96,500 VND to 95,000 VND, a decrease of 1.55%.

 Demand continues to be strong from various markets such as the US, EU, Asia, Africa, especially for immediate and further shipment in 2024.

 The amount of pepper being offered for sale has become very limited as the market adjusts downwards. Farmers and agents continue to prioritize storing goods.

The price of coffee has also approached the price of pepper. Therefore, many farmers have sold coffee and bought pepper to increase their inventory with the expectation that the price of pepper will rise in 2024.

 

 Update the latest domestic and world pepper prices on March 4, 2024

Pepper price  today is 4/3 in the world

In the world, the pepper market on March 4 remained stable in many countries.

Accordingly, the price of Lampung black pepper in Indonesia is anchored at 3,896 USD/ton. The price of Muntok white pepper in this country remains at 6,142 USD/ton.

Malaysia's Kuching ASTA black pepper price remained stable at 4,900 USD/ton; This country's ASTA white pepper is still priced at 7,300 USD/ton.

For the Brazilian market, the price of ASTA 570 black pepper is at 4,270 USD/ton.

In Vietnam, export prices of black pepper grades 500 and 550 g/l remained at 3,900 and 4,000 USD/ton, respectively. The export price of white pepper reached 5,700 USD/ton.

Pepper type	Price (Unit: USD/ton)	Change
Lampung black pepper (Indonesia)	3,896	–
Brazilian black pepper ASTA 570	4,270	–
Kuching black pepper (Malaysia) ASTA	4,900	–
Muntok white pepper	6.142	–
ASTA Malaysian white pepper	7,300	–

Today's world pepper prices  have no new fluctuations. Summing up last week, the global pepper market fluctuated in opposite directions with only India reporting a decrease.

Thus, world pepper prices on March 4, 2024 were flat compared to yesterday.

Pepper price today  is 4/3 in the country

Domestically, the pepper market on March 4 had no new fluctuations compared to yesterday.

Specifically, Dak Lak and Dak Nong traded at 95,500 VND/kg;

In Gia Lai, pepper price today remains at 93,000 VND/kg;

In Dong Nai, traders buy it at a price of 93,500 VND/kg;

The latest pepper price in Ba Ria - Vung Tau still reaches 95,500 VND/kg;

Binh Phuoc traders trade at 95,000 VND/kg.

Province	Price	Up and down
Dak Lak	95,500	–
Dak Nong	95,500	–
Gia Lai	93,000	–
Dong Nai	93,500	–
BA Ria Vung Tau	93,500	–
Binh Phuoc	95,500	–

Latest domestic pepper price list dated March 4, 2024. Unit: VND/kg

 Domestic pepper prices  today  are flat with the highest level reaching 95,500 VND/kg. Summarizing last week, the domestic pepper market increased rapidly from 3,000 - 4,000 VND/kg.

Evaluating this week, experts believe that domestic pepper will still be anchored at a high level, the upward momentum is still there but is no longer strong when new crops are about to hit the market.

Mr. Hoang Phuoc Binh - Vice Chairman of Chu Se Pepper Association (Gia Lai) commented that the general trend this year is that prices will continue to increase and can completely return to the mark of more than 100 thousand VND/kg in the near future. time is not far away.

Global and Vietnamese pepper production is forecast to decrease, along with many farmers not being in a hurry to sell pepper to the market, contributing to scarcity as well as keeping pepper prices high.

Thus, domestic pepper prices on March 4, 2024 are trading around 93,000 - 95,500 VND/kg.

According to Nongnghiep.vn

Pepper Talk// Pepper Market Report by Royal Golden// Week 10 – 2024

 

Week 9 ended firm on Saturday at level 96,000 VND per kg after some reported covering from shippers that had happened at level 95,000 VND. 
Overall, since the beginning of the year, black pepper prices have increased by about 14%. Having about an upsurge of 28% for February this year compared to last year same month period, while about 15% beginning March in comparison to last February beginning. 

Speculations continues as most of the farmers are allegedly a firm believer that pepper price cycle is set to a new record high. Further, with coffee and durian that are keeping them well funded, there seems to no selling pressure happening despite a reported 50% harvested crop already with farmers that are opting to store their pepper, waiting at the right time and price to sell it.  

Today, market remains firm, opening up with some buying demand happening. 
Muntok White Pepper remains stable to firm still being influenced by Vietnam bullish trend in addition to raw material that are very scarce.   

Brazil still few offers available. Local material last seen at level 19 BRL/kg.

In terms of ocean freight scenario, with Red Sea situation that continues to impact the capacity and equipment, carriers are announcing GRI/PSS/contingency charges with pressure for the additional cost involve for the rerouting via Cape of Good Hope. Expectations are that the Peak Season quantum will be mitigated or even softens by March month but that would remain to be seen. 

Pepper market on March 3, 2024: Increased from 1,000 VND/kg to 3,000 VND/kg in the past week

 

Pepper prices today  (March 3) fluctuate between 92,000 - 93,500 VND/kg. Last week, the pepper market tended to go up. Compared to the beginning of the week, key provinces recorded the highest increase of 3,000 VND/kg.

According to the survey, the lowest price is currently 92,000 VND/kg recorded in Dong Nai and Gia Lai provinces, increasing by 2,000 VND/kg and 3,000 VND/kg respectively. Next is Ba Ria - Vung Tau province with an increase of 1,000 VND/kg, currently priced at 93,000 VND/kg.

This is also the pepper price recorded in Dak Lak and Dak Nong after increasing by 1,500 VND/kg last week.

Currently, Binh Phuoc province has the highest pepper price of 93,500 VND/kg, an increase of 1,500 VND/kg compared to last weekend.

Update pepper information

The pepper market increased 8% last week and is up 12.6% since January 2024, according to Peppertrade.

On Saturday, February 24, black pepper prices decreased after peaking at 98,000 VND on February 22, 2024. By the end of the week, the price increased to 94,000 VND. Overall, black pepper prices increased by 8% compared to last week. Since the beginning of 2024, black pepper prices have also increased by 12.6%.

Many farmers and agents believe that coffee prices are unlikely to increase by 400 USD/ton this year.

However, black pepper prices are likely to increase by $1000 - $1500/MT in the near future. Therefore, many farmers and agents continue to prioritize selling coffee and switch to storing black pepper, leading to a lower amount of black pepper traded on the market than in previous years.

On many social networking forums (with more than 200,000 members), many farmers have begun to expect that black pepper prices will continue to increase by at least 20-30% in the near future. This has reinforced the psychology of stockpiling black pepper in the farming community. Farmers increasingly believe in the increasing price cycle of black pepper and almost refuse to sell when the market adjusts downward.

According to VietnamBiz.vn