Vietnam’s Flourishing Pepper Industry

Vietnam’s pepper sector is experiencing remarkable growth, achieving significant value increases. Holding 40% of the global supply and accounting for 60% of exports, the industry saw its export revenue surpass $1.3 billion in 2024, marking its highest level in eight years.

The Vietnam Pepper and Spice Association (VPSA) reports that pepper is cultivated on approximately 113,000 hectares, yielding an annual production of about 190,000 tons. In 2024, nearly 250,000 tons were exported, reinforcing Vietnam’s status as the largest pepper exporter worldwide.

While the export volume decreased compared to 2023 by 6.2%, the overall value of exports experienced a remarkable increase of 44.4%, mainly due to soaring global prices.

The average price for Vietnamese black pepper in 2024 climbed to $5,154 per ton, reflecting a 49.7% rise, while the white pepper price reached $6,884 per ton, an increase of 38.9%. At times, Vietnam’s pepper prices were among the highest globally.

Domestically, prices skyrocketed too. At the beginning of 2024, black pepper was about 80,000 VND ($3.40) per kilogram, but by June, it surged to 180,000 VND ($7.65). By year-end, prices stabilized between 146,000 to 147,000 VND ($6.20).

This growth translated into impressive gains for the industry, with some companies reporting export revenues increased by up to 150% from the previous year, while farmers enjoyed profits of 60,000 to 100,000 VND ($2.55–$4.25) per kilogram.

VPSA President Hoang Thi Lien links the steep price increases to a marked decline in global supply.

Looking ahead to 2025, global pepper production is expected to decline further as farmers transition to other crops amidst rising production costs. Moreover, extreme weather has diminished yields in major producing nations like Indonesia, India, Malaysia, Sri Lanka, and Brazil.

The harvest season in Vietnam for 2025 is forecasted to be from February to April, slightly delayed due to drought conditions. With stable demand in key markets such as the U.S. and Europe, it’s anticipated that pepper prices will remain elevated.

Additionally, China is expected to boost its imports in early 2025 as its domestic supplies dwindle.

“Given the current scenario, global pepper production is unlikely to meet rising demand in the next 3–5 years. Vietnam is entering a new price cycle that aims to offset past low returns,” stated Lien.

Hoang Phuoc Binh, Vice Chairman of the Chu Se Pepper Association, highlighted that the pepper industry undergoes unique price cycles, with the last one peaking in 2015 at 230 million VND ($9,780) per ton. The current cycle, which started in 2024, may persist for up to a decade, with prices potentially reaching record highs of 350,000 to 400,000 VND ($14.85–$17) per kilogram in the long term.

Binh noted that pepper cultivation is declining, partly due to aging plants and farmer shifts to other crops. Any effort to expand production will take time to affect supply since new pepper trees take four years to mature.

In light of this, Vietnamese farmers are now focusing on better sustainability practices. Instead of expanding cultivation, they are enhancing quality, using intercropping techniques to cut costs, and adapting to climate conditions.

Businesses are also moving towards producing high-value processed pepper products, aiming for niche markets while boosting Vietnam’s brand recognition in the global spice sector.

Industry leaders emphasize that agricultural exports, including pepper, present a renewable economic resource compared to non-renewable minerals, ensuring sustainable profitability if managed correctly.

“There is no more valuable resource than agriculture. Unlike mining, which diminishes resources, crops like pepper can provide ongoing returns. The global market is recognizing agriculture’s potential, and Vietnam should leverage this opportunity,” states Phan Minh Thong, CEO of Phuc Sinh Group.

The future of Vietnam’s pepper industry appears bright, but ensuring long-term sustainability will be essential. With effective strategies, Vietnamese farmers and exporters can continue to thrive globally and secure better livelihoods in the years to come.