A new price increase cycle is beginning, which could be unpredictable. Vietnamese exports are once again opening wide the door to the group of billion-dollar commodities.

Today's pepper prices in the provinces of Dong Nai (138,000 VND/kg); Dak Lak (138,500 VND/kg); Dak Nong (138,500 VND/kg); Ba Ria - Vung Tau (138,000 VND/kg) and Binh Phuoc (137,500 VND/kg).

Thus, after a day of decline, domestic pepper prices today reversed course and increased slightly in key producing areas, with an increase of 500-1,000 VND/kg. The highest price reached 138,500 VND/kg.

Pepper prices are remaining high and are forecast to continue rising as global demand remains strong while supply is limited. The Vietnam Pepper and Spice Association (VPSA) predicts that Vietnam's pepper exports this year will exceed $1 billion, bringing pepper back into the group of billion-dollar industries.

According to VPSA, as of July 30th, Vietnam had exported 164,357 tons of various types of pepper; including 145,330 tons of black pepper and 19,027 tons of white pepper. The total export value reached US$764.2 million. With these results, it is entirely possible that pepper exports could return to the billion-dollar mark within the next five months.

Compared to the same period in 2023, pepper exports decreased by 2.2%, however, export value increased by 40.8%. The average export price of black pepper in the first seven months reached US$4,568/ton, and white pepper reached US$6,195/ton, increasing by US$32.7% and US$25% respectively compared to the same period last year.

In July, domestic pepper prices reached VND 150,000/kg, an increase of 82.9% compared to January and a 120.6% increase compared to the same period in 2023. On average, black pepper prices over the first seven months increased by 66.5% compared to the same period in 2023.

VPSA believes that the increase in pepper prices over the past three months is due to reduced harvest yields in Vietnam and Brazil, leading to a supply shortage. The pepper market is facing many difficulties and challenges. Prices are expected to continue fluctuating in the coming period.

According to Mr. Hoang Phuoc Binh, Vice Chairman of the Chu Se Pepper Association (Gia Lai), producers need to realize that a new price increase cycle is beginning. This price increase cycle will last for about 10 years.

Based on surveys conducted in key pepper-growing regions of Vietnam, including the three Central Highlands provinces (Gia Lai, Dak Lak, and Dak Nong) and the three Southeastern provinces (Binh Phuoc, Dong Nai, and Ba Ria Vung Tau), Mr. Hoang Phuoc Binh noted that the area planted with pepper has decreased by up to 50% compared to its peak period.

Based on this reality, according to Mr. Hoang Phuoc Binh, this price increase cycle will occur in a context where supply will be even lower than in previous price increase cycles.

However, according to VPSA's assessment, increasing competition from other crops such as durian and coffee, along with the negative impacts of climate change, are the main reasons why pepper prices are unpredictable. The next crop's yield may be similar to or slightly higher than in 2024.

Mr. Hoang Phuoc Binh, Permanent Vice Chairman of the Chu Se Pepper Association, commented on the upcoming pepper harvest, noting that there is currently conflicting information. Some say prices will decrease, others say they will increase, leading to considerable confusion. Some farmers shared that their pepper gardens did not bear fruit this season. However, others said they expect a bumper harvest. All of this is attributed to the influence of weather conditions.

On the world market, at the close of the most recent trading session, the International Pepper Community (IPC) listed the price of Lampung black pepper (Indonesia) at US$7,334/ton, up 0.49%; the price of Brazilian ASTA 570 black pepper at US$6,175/ton, up 1.21%; and the price of Kuching black pepper (Malaysia) ASTA at US$8,500/ton.

Muntok white pepper is priced at US$8,635/ton, up 0.5%; Malaysian ASTA white pepper is priced at US$10,400/ton.

Vietnamese black pepper is trading at US$5,800/ton for the 500 g/l grade; US$6,200/ton for the 550 g/l grade; and white pepper at US$8,500/ton. IPC increased pepper prices in Indonesia and Brazil.