The supply shortage has caused pepper prices to remain high. However, buyers, especially farmers, should not speculate or profit from short-term pepper prices due to unexpected market risks.
According to the Vietnam Pepper and Spice Association (VPSA), by the end of October 2024, Vietnam had exported 219,387 tons of pepper of all types. The total export turnover reached over 1.1 billion USD.
Compared to the same period last year, the export volume decreased by 1.9%; however, the export turnover increased by 48%.
The average export price of black pepper in 10 months reached 4,971 USD/ton, an increase of 1,528 USD; and white pepper reached 6,626 USD/ton, an increase of 1,671 USD compared to the same period in 2023.
Pepper prices remain high, but beware of unpredictable risks.
Notably, among the top 10 largest export markets, China decreased by 84%.
Overall, the Asian market decreased by 32.7%, while both American and European markets increased by 43.7% and 31.8%, respectively.
Ms. Hoang Thi Lien, Chairperson of the VPSA, said that the output in the 2024-2025 crop is expected to increase. Due to high prices, farmers are taking better care of their pepper gardens. The increase in purchasing power from the European and American markets has compensated for the significant decline from the Chinese market.
The VPSA expects that in the next crop, the Chinese market will actively recover positively because in 2024, this market only bought about 10,000 tons.
For other markets, customers have mostly prepared enough supplies this year. The pressure to buy immediately at the start of the season is not high, so customers will not be in a hurry.
The VPSA predicts that the cycle of rising pepper prices could remain stable for the next 2-3 years. However, in the general context, the decrease in supply helps maintain high pepper prices.
“The cycle of rising pepper prices may remain stable for the next 2-3 years because the VPSA has not yet seen any sign of a large source of pepper to the market, putting downward pressure on prices,” Ms. Lien said.
According to the VPSA, due to the fluctuations caused by the recent increase in pepper prices, the business community has better prepared for the upcoming crops.
In the trend of high pepper prices, many businesses have better prepared their supplies as well as long-distance contracts and reduced fictitious contracts.
Not only exporters and importers, but also many domestic buyers, including farmers, have a demand for pepper. For pepper farmers, the price of pepper and the potential profit depend on the investment.
Ms. Lien advised farmers to invest wisely and have a long-term vision, possibly 3-6 months or longer. If there is no immediate need, farmers do not need to sell pepper.
“The purchase of pepper should depend on the available capital. We should not speculate in the short term because it is difficult to avoid unexpected risks due to market fluctuations,” Ms. Lien said.
2024 marks the beginning of a price increase cycle for pepper after several consecutive years of low prices. The development of pepper today needs to ensure sustainability, avoiding the situation of cutting and replanting. Furthermore, the overuse of inorganic fertilizers in previous years has weakened the pepper plants, and pesticide residues have been detected in the pepper.