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Must-know things about wholesale pepper in the world

Pepper is considered as “King of spices” in the world due to its application in both medical and culinary uses. Therefore, pepper has become a developed business field. Hence, there are appealing facts both pepper traders should notice about the wholesale pepper market.

If you are looking to learn about wholesale pepper, the first thing other importers are interested in is the wholesale price of pepper and the factors that affect it. This determines 70-80% of the success and profitability of your business. So you should watch this video to get important information about price and the factors that affect it. In the following article, this issue will also be explained more clearly and in more detail.

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An overview of wholesale pepper in the world

Accounting for more than one-fifth of all imported spices, pepper is by far the most traded spice in the world. Most of the pepper originates from Vietnam, India, Indonesia, and Brazil and is exported to China, the US, and Germany.

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An overview of wholesale pepper in the world

Price of wholesale pepper

In August and September 2021, wholesale pepper prices had an upward trend. Compared to the wholesale pepper average price in 2020 by month of, several export countries reached their peak prices in 4 years:

Countries Average price by month in 2020 Average price by month in 2021 (up to October)
Indonesia 2.7653 USD/kg 3.3717 USD/kg
Brazil 2.08225 USD/kg 3.18768 USD/kg
Malaysia 3.43957 USD/kg 3.6384 USD/kg
India 3.8224 USD/kg 3.9054 USD/kg
Vietnam 2.3756 USD/kg 3.6469 USD/kg

A confluence of events has been blamed for the increase in wholesale black pepper price in 2021:

  • During the festival season, the revival in different industries due to remission of the Covid – 19 pandemic promotes the demand for black pepper rose.
  • In addition, erratic weather also causes negative effects on harvest-ready crops.

In conclusion, the supply shortage and high demand in major markets such as the US, China, and Europe have resulted in a booming wholesale pepper price in 4 years.

Wholesale pepper – Key demand markets

According to OEC, the total pepper importation value in 2019 was $1.27B. 5 countries are leading the demand for wholesale pepper, including:

Countries Import value (M) Market share (%)
US 179 14.1
China 141 11.2
India 120 9.46
Germany 97 7.71

Top 4 countries with the largest pepper import value in 2019
(Sources: https://oec.world/)

Each country imports pepper for specific purposes:

  • The U.S: the wholesale pepper demand of the U.S made North America one of the leading demands for the pepper market due to the growing demand for confectionery and bakery products and the increase in the use of pepper in beauty products.
  • China: the high import value of pepper in China is due to the population and other exporting activities. Large amounts of pepper importation in China originate from domestic demand for culinary and medical uses.
  • Indian: Indian pepper has a distinctive harvesting method, which makes the cost and the oleoresin value not suitable for the oleoresin industry. Consequently, India imports mainly from Viet Nam and Sri Lanka – countries that harvest immature berries are collected to use in the oil and oleoresin.
  • Germany: the German market demands black pepper for use in daily dishes and to serve the growing pepper processing industry.
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Countries with the largest pepper import value

It is noticeable that the high population countries accounted for more than 30% of the pepper import market share. 2019 also witnessed the most pace of growth of the pepper industry. Global imports peaked in 2020 and are expected to retain growth soon.

Wholesale pepper – The future prediction

The Agency of Foreign Trade – Ministry of Industry and Trade forecasts that pepper prices will continue to rise in the following months because:

  • The complicated development of the COVID-19 epidemic has affected harvesting and processing difficulties, which lead to supply disruptions.
  • Goods transporting is congested, export contracts are stalled because the freight cost is too high.
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The future prediction of wholesale pepper

Otherwise, the pepper industry promotes exports to serve the cosmetic industry. Because of the social distancing order, the demand for pepper used in hotels and restaurants has a negative impact. The top leading pepper suppliers: Vietnam and Indonesia are overcoming a quite difficult period, especially in Brazil – a country facing a serious decrease in pepper production.

Top of the world’s largest wholesale pepper exporting countries

Being the “King of spices” in the world, the majority of wholesale pepper is exported through the years by 5 countries, including Viet Nam, Brazil, Indonesia, Sri Lanka, and India.

Country Export Value (M) Market Share (%)
Vietnam 577 45.5
Brazil 184 14.5
Indonesia 142 11.2
Sri Lanka 47.5 3.75
India 44.4 3.51

Top 5 countries with the largest pepper export value in 2019
(Sources: https://oec.world/)

  • Vietnam was a leading country exporting wholesale pepper with more than 45.5% market share. Since 2019, Vietnamese pepper has been exported to 105 countries and territories around the world. Vietnam pepper export turnover in 2001 reached 90 million USD, by 2018 this figure has reached 758.8 million USD, an increase of more than 700%.

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  • Brazil has been spicing the world with black pepper. Pepper from Brazil is widely traded in the U.S, Africa, Asia, and European countries. In 2020, the top 5 countries that import Brazil’s pepper are the U.S with 5.911 MT, Morocco with 5,014, Vietnam with 4,323 MT, Germany with 4,091 MT. Pepper’s growing advantage is geographical: lowlands, a suitable amount of rain, and mild winter.
  • Indonesia‘s main wholesale pepper export markets include Vietnam, China, and the US, accounting for 50% of the country’s total pepper exports. In the first 9 months of 2001, Indonesia’s pepper exports to Vietnam, China decreased by 50% and 40% respectively. Indonesia’s pepper production and productivity decreased to focus on supplying the domestic market.
  • Sri Lanka is one of the pepper-producing countries in South Asia popular for its pepper quality: high amount of piperine and a natural antioxidant. Sri Lanka’s best-performing destinations of pepper are India, Germany, the U.S, and Spain. India is the largest importer of Sri Lanka pepper due to the preference for import tax under SAFTA.
  • India is known as the home of spices, boasts a solid history of trading with China. Today, India wholesale pepper is among the most sought-after globally, given the distinctive aroma, taste, and medicinal value. Traditionally, spices in India have been grown in small landholdings and organic farming techniques.
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Countries with the largest pepper export value

Each country has its advantage, which buyers should notice to import pepper with a reasonable price and expected quality.

Several reasons contribute to the large export value of these countries:

  • A large growing area is a key factor for these countries to be in the top leading pepper exporters in the world. Vietnam and India have 148.000 and 138.000 ha for pepper cultivation, followed by Indonesia with 117.900 ha. Sri Lanka and Brazil have modest pepper planting areas with 40.000 and 30.000 ha.
  • Natural conditions also play an important role in pepper exporting countries. Some of the pepper exporting countries such as Vietnam, India, Brazil, and Indonesia have advantages of nature, land, and climate to grow pepper trees: lowlands, a suitable amount of rain, and mild winter.

For another, with the support from governments, the wholesale pepper trade between countries has also been promoted recently. The Import-Export department illustrates the EVFTA Agreement, which EU countries sign to eliminate tariffs on pepper, giving a lever for Vietnamese companies to export to EU markets.

Key elements affecting wholesale pepper price

To achieve success in the wholesale pepper industry, buyer and seller should notice these 3 elements contributing to a stable wholesale pepper trade:

Pepper demand and supply volume

Choosing a wholesale pepper market is affected by the quantity that a country can produce

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Production and price of wholesale pepper in several pepper exporting countries

Stable sources of pepper depend mainly on the total pepper production. The time when pepper trees provide high quality and quantities products are in the harvest season – which depends on each country:

  • Supply volume: Sources in the spice industry pointed out that world pepper export price is down due to higher production in many countries. Vietnam witnessed a 30% increase in pepper production but the price decreased by 50% between 2017 and 2019. The noticeable changes also happened to Indonesia and Brazil: an upward trend in pepper production as long as a noticeable downward trend in pepper price.
  • Demand: At a specific time of time, a sudden increase in prices will happen If the demand is too high compared to the supply. As mentioned, in 8/2021, a similar situation happened, which makes Vietnam, Indonesia, and Brazil’s pepper prices were 43 – 45 % higher than the beginning of the year and 62 – 83% over the same period last year.

Government Policies

A successful wholesale pepper business is strongly connected with government policies. For instance, with the support of the government in signing the EVFTA, enterprises have advantages in reducing prices because the tariff is eliminated by 99%. This make wholesale pepper prices decrease when being traded and prompted the development of the pepper industry. Due to the EVFTA Agreement, Viet Nam has become one of the world’s largest pepper exporters.

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Government policies affect wholesale pepper price

Shipment

In agricultural products such as pepper, shipment payment plays a vital role in deciding whether to purchase products, especially in the Covid – 19 pandemic.

  • The situation of goods transportation being stalled will increase logistics costs, which will lead to a decrease in pepper export volume. For instance, total container volumes handled at Chinese ports dropped by 10.1% in the first months of 2020 – the breakout of Covid-19.
  • The same situation happened to both key exporters, like Brazil, India, and Vietnam as well as importers like the European Union. In Vietnam, the sea freight routes witnessed the most galloping and unusual increase with an increase of about $1.500 – 2.000$ for a 40-foot container every two weeks.
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Stalled goods transportation increases logistic cost

The high cost of shipping increases costs when making bulk purchases of black pepper and may reduce the competitive advantage of each country’s exporting activities in the long term.

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High cost of shipping effect wholesale pepper price

In short, the wholesale pepper price is affected by different external factors. Importers should notice government policies and the characteristics of the supply and shipment of each country to negotiate a reasonable price.

Procedures when working with wholesale pepper supplier

Buyer should know basic steps of the process of a pepper order:

  • Step 1: Buyer sends the letter of intent
  • Step 2: Seller replies with official FCO
  • Step 3: Discuss the terms in FCO
  • Step 4: Agree with the final FCO
  • Step 5: Send draft contract
  • Step 6: Discuss and finish the contract
  • Step 7: Send a sample for testing (optional)
  • Step 8: Payment instrument
  • Step 9: Loading goods and sending the documents
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Procedures when working with wholesale pepper supplier

Due to the high value of orders, both buyers and suppliers should be cautious to ensure the transaction process is transparent, clear, and convenient, thereby creating a solid foundation for future transactions.

Top 3 famous wholesale pepper companies

Choosing trustworthy wholesale pepper suppliers helps the buyers retain high-quality sources. Here are the top 3 famous wholesale pepper suppliers for you to consider:

Olam Food Ingredients

OFI is famous for its raw materials and ingredient platform: cocoa, coffee, dairy, nuts, and spices. The deep involvement at every stage of the pepper supply can help to manage quality, traceability, and risk.

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Olam Food Ingredients

K-Agriculture

K-Agriculture is a leading pepper factory in the world, which distributes wholesale pepper to more than 100 nations. With the motto “Quality is King”, the company always ensures product quality in any circumstances. Not only due to the proven product quality but the company’s reputation can also be expressed by the ingenious board of directors under the leadership of Mr. Daniel Trong Quy.

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K-Agriculture: A prestigious wholesale pepper exporter

Contact information:
Email: info@k-agriculture.com
Website: https://k-agriculture.com/
Whatsapp: +84855 555 837

Baria pepper

Established in 1985, Baria pepper aimed to take considerable knowledge of both the product and the local market to reach more customers domestically and internationally. Baria pepper has been exported to America, Europe, the Middle East, and other countries in Asia. With the strong connection with local farmers, Baria pepper has a great advantage in controlling the quality and price of the pepper.

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Baria pepper

Conclusion

If you want to learn more about the pepper industry and wholesale pepper on a worldwide scale, feel free to visit our website: k-agriculture.com or contact us via Whatsapp: +84855 555 837

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