Domestic prices have increased by over 120% year-on-year, and global prices have surged. What are the reasons?

Specifically, the price of pepper today in Gia Lai is 146,000 VND/kg.

Today's pepper prices in the provinces of Dong Nai (147,000 VND/kg); Dak Lak (147,000 VND/kg); Dak Nong (147,000 VND/kg); Ba Ria - Vung Tau (147,000 VND/kg) and Binh Phuoc (147,000 VND/kg).

Thus, after two days 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 147,000 VND/kg. Overall, pepper prices decreased by an average of 3,000 VND/kg over the past week.

According to a survey conducted by the Vietnam Pepper and Spice Association (VPSA) in three Central Highlands provinces in early July, pepper cultivation is facing increasing competition from coffee and durian. The area under new pepper cultivation is not large, mainly intercropped with coffee at a ratio of 6:2.

Following the 2024 harvest, a 100-day drought in the Central Highlands severely affected many pepper plantations. This was immediately followed by heavy rainfall in the third week of May in Binh Phuoc and Dak Nong provinces, causing flooding in the pepper gardens. The humid weather created a favorable environment for pests and diseases affecting pepper plants, such as yellowing leaves, slow wilting, stink bugs, algal spots, and nematodes.

As a result, pepper gardens are prone to fruit drop, nutrient deficiencies, yellowing leaves, waterlogging, and pest and disease infestations, leading to a high rate of premature fruit drop. The yield for the next season may be similar to or only slightly higher than in 2024.

The average domestic pepper price in July reached VND 150,000/kg, an increase of 82.9% compared to January and 120.6% compared to the same period in 2023. On average, the price of black pepper in the first seven months of 2024 increased by 66.5% compared to 2023. Supply shortages due to reduced harvest yields in Vietnam and Brazil are the main reasons for the price increase since the beginning of the year.

The International Pepper Community (IPC) noted that the pepper market this week continued to show mixed reactions. After declining for the past three weeks, Indian pepper prices, both domestically and internationally, tended to rise this week.

Exports from the world's major producing countries showed contrasting trends. In the first half of 2024, the world's two leading exporters, Vietnam and Brazil, saw declines of 6.8% and 6% respectively. Similarly, Malaysia's exports decreased by 8.1%, while Indonesia and India's exports increased by 48.3% and 34.1%, respectively.

Compared to the same period in 2023, in the first six months of 2024, the average FOB price of black and white pepper in most major producing countries increased sharply, except for India. Specifically, the average FOB price of black pepper increased by 27% and the average FOB price of white pepper increased by 14% compared to the same period last year. The strongest increase was recorded in Brazilian black pepper, followed by Vietnam and Indonesia.