Pepper prices in the domestic market are experiencing a sharp decline, currently fluctuating between VND136,000-140,000/kg. This is a significant decrease compared to the peak of more than VND200,000/kg in early June 2024. Notably, this decline occurred in the context of China, one of Vietnam's largest pepper consumption markets, sharply reducing its purchase volume compared to last year.

According to information from growers and businesses, pepper prices in many key growing regions such as the Central Highlands and the Southeast continued to decrease by 1,000 - 4,000 VND/kg compared to previous days. In the Central Highlands, pepper prices in Dak Lak dropped to 139,000 VND/kg, while in Gia Lai and Dak Nong, prices ranged from 138,000 - 140,000 VND/kg. In the Southeast region, pepper prices in Ba Ria - Vung Tau, Dong Nai, and Binh Phuoc decreased to 136,000 - 138,000 VND/kg.

The current price has dropped sharply from the peak of over VND200,000/kg in early June, marking the lowest level in many months. However, pepper prices are still VND55,000 - 60,000/kg higher than the same period last year.

The supply of this pepper item is still low (Photo: VnEconomy)

According to the Vietnam Pepper and Spice Association (VPSA), while major markets such as the US, Europe and India have all increased their purchases of pepper from Vietnam, China has significantly reduced its purchases. In the first 6 months of 2024, China dropped from No. 1 to No. 5 in the list of Vietnam's largest pepper importers. Specifically, China only bought 7,451 tons, worth 20 million USD, down 85.2% in volume and 81.7% in value compared to the same period last year. China's market share also narrowed from 33% to 5.2%.

Ms. Hoang Thi Lien - President of VPSA - said that this sharp decrease could be due to China buying in large quantities last year, leading to large inventories, and the Chinese economy is currently facing difficulties. However, Ms. Lien also emphasized that the decrease in pepper prices is not only due to China reducing purchases, but could also be due to a short-term increase in supply when people sell at high prices.

Although major markets such as the US and Europe have increased purchases in the first half of 2024, Ms. Lien believes that pepper prices will hardly increase sharply again if these two markets do not continue to buy a lot in the last months of the year. However, she also believes that pepper prices will hardly decrease further because the world supply is still not enough to meet demand, even when Indonesia, Brazil, and Vietnam are preparing for the harvest season.

Many experts also agree with this view, saying that the current pepper supply is still low, especially in Vietnam - a country that supplies 40-50% of the world's pepper. Pepper growing areas have been continuously decreasing in recent years, and new planting has not been done much. For pepper plants to achieve productivity, it takes at least 3 years from the time of new planting.

Pepper prices are currently under downward pressure due to a decline in purchases from China and a short-term increase in supply. However, with supply not being sufficient to meet global demand, pepper prices are unlikely to fall further in the near future.