Pepper: Reduced area, reduced output

Lowest output in 10 years

MARD information, the total pepper area reached 115,000ha in 2023, down 4.2% compared to 2022 and 24.3% compared to 2017, reaching the highest pepper plantation with around 151,900ha.

According to MARD's plan, the pepper area will decrease to around 110,000ha shortly. The main reason for the decline is the influence of weather, pests, and the recent sharp increase in the prices of crops such as durian and coffee, which has led farmers to switch crops rather than maintain pepper farms.

The three Central Highlands provinces (Dak Nong, Dak Lak, and Gia Lai) are the main production areas, accounting for 63.5% of the area. In contrast, the eastern region accounts for 29.1% of the area, mainly in 3 provinces: Binh Phuoc, Dong Nai, and Ba Ria-Vung Tau. Some other provinces, such as Quang Tri, have 2,100ha and Lam Dong 2,000ha, respectively.

After reaching a record output of 290,000 tons in 2019, Vietnamese pepper production has declined steadily. 2023 production increased to 190,000 tons compared to 183,000 tons in 2022.

In 2024, due to climate change difficulties, pepper prices will remain low while the prices of other agricultural products increase. At the same time, the rise in prices of different farm products will put pressure on reducing cultivated area, while pepper productivity will also be reduced due to moderate investment in caring for and maintaining pepper gardens.

Vietnam pepper production is expected to reach 170,000 tons in 2024, the lowest output since 2015. Dak Nong has the most significant output, accounting for 41.2 percent, followed by Dak Lak with 28.2 percent. The six central pepper-producing provinces account for 97.1% of the country's production.

Export prices reversed at the end of the year

In 2023, Vietnam exported 264,094 tons of pepper of all kinds, of which black pepper reached 236,148 tons and white pepper reached 27,946 tons. Total export turnover reached US$ 906.5 million, black pepper reached US$ 770.6 million, and white pepper reached US$ 135.9 million, respectively. Compared to 2022, export volume increased by 13.8%, but export turnover decreased by 8.0%.

The average export price of black pepper reached US$ 3,585 per ton, and white pepper reached US$ 5,091 per ton; compared to 2022, the export price of black pepper reached US$ 3,591 per ton, white pepper reached US$ 5,095 per ton, a decrease of  US$ 420 per ton with black pepper and US$ 635 per ton for white pepper.

Production of the top exporting enterprises in 2023 is as follows: Olam Vietnam, with 20,306 tons, accounting for 7.7%, down by 30.3% compared to 2022. Nedspice Vietnam with 19,187 tons, accounting for 7.3%, an increase of 13.9%; Pearl with 16,538 tons, accounting for 6.3%, down 35.7%; Phuc Sinh with 15,802 tons, accounting for 6.0%, up 6.6%; Haprosimex JSC with 10,927 tons, accounting for 4.1%, down 14,0%.

Leading exporters of white pepper include Nedspice Vietnam with 3,652 tons, Olam Vietnam with 3,350 tons, Pearl with 2,305 tons, Lien Thanh with 2,010 tons and Phuc Sinh with 1,882 tons.

Asia is Vietnam's largest pepper export market, accounting for 52.7%. Compared to 2022, export volume increased by 29.6%, of which China is the leader with 60,135 tons, accounting for a 22.8% share of Vietnam's exports and increased by 174.0%.

India followed this with 12,812 tons, 4.9%, up 4.2%; the UAE with 12,132 tons, accounting for 4.6%, down 24.7%; the Philippines with 8,021 tons, accounting for 3.0%, up 27.5%.

The Americas region ranked second in terms of export market share, accounting for 22.8%, an increase of 0.3%, of which the US alone is the second largest export market of Vietnamese pepper, reaching 54,271 tons, accounting for 20.5%, less by 0.8% compared to 2023.

The market share of pepper exported to European markets accounted for 19.5%, a decline of 1.4% compared to 2022. The leading export markets were Germany with 9,216 tons, a drop of 4.5%; the Netherlands with 7,946 tons, a decline of 1.9%, Russia with 5,490 tons, a decrease of 12.7%; and the UK with 4,923 tons, a drop of 3.0%. Export volume to Turkey, France, and Spain increased, while export volume to Ireland fell by 75.8% to 1,194 tons.

Market share of pepper exported to Africa increased by 7.8%, of which Egypt reached 4,247 tons, an increase of 23.5%; South Africa 2,408 tons, an increase of 17.0%; Senegal 2,372 tons, an increase of 41.1%.

The leading export markets for white pepper are the US with 3,759 tons, Germany with 3,324 tons, China with 2,828 tons, the Netherlands with 2,663 tons, and Thailand with 2,307 tons.

The average domestic price reached VND 57,000 per kg at the beginning of 2023, the lowest level since March 2021. The price increased at the end of the first quarter of 20 and changed much in November 2023.

In December, the price increased continuously, reaching VND 86,000 per kg at times, resulting in an average cost for the whole month of VND 81,000 per kg. This price increased by 42% compared to the beginning of the year.

The price increase at the end of the year was partly due to the lack of stocks. The US market suddenly showed strong consumption in the last three months of the year, especially in December, the highest import month, reaching over 6,200 tons. These may be the previous orders delivered before the end of the year, so purchases are needed.

Combined with the delayed harvesting season in Dak Nong, it was temporarily in short supply, increasing domestic prices. The increase in domestic prices also led to the rise in black and white pepper export prices. On average, the export price of black pepper increased by 5.0% and that of white pepper by 1.9% by the end of the year.

In 2023, Vietnam imported 26,538 tons of pepper of all kinds, of which black pepper was 24,903 tons and white pepper 1,635 tons. Compared to 2022, the import volume decreased by 27.7% in 2023. The major importers were Olam Vietnam, with 9,127 tons, accounting for 34.4% of the market share and down 16.0% from the previous year followed by Pearl with 4,223 tons, accounting for 15.9%, an increase of 19.3%; Lien Thanh with 2,214 tons, accounting for 8.3%, a rise of 28.1%; Son Ha Spices with 2,056 tons, accounting for 7.7%, increased 38.6%; and KSS Vietnam with 2,000 tons, accounting for 7.5%, decrease 18.8%.

The primary source of imports was Brazil, 16,598 tons, accounting for 62.5%, an increase of 31.6% over last year, followed by Cambodia, 3,763 tons, 14.2%, a decrease of 71.7%; Indonesia, 3,237 tons, 12.2%, a reduction of 43.8%.

Vietnam has been the world leader in pepper production and export for over 20 years. Vietnam's pepper is exported to over 100 countries and territories and dominates many essential markets.

According to the Vietnam Pepper and Spice Association (VPSA), in the last three years, pepper exports usually peaked within four months, from March to July. March 2023 recorded up to 36,000 tons of export peppers.