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Vietnam pepper export activities and must-know things for traders

Vietnam pepper export activities have increased in price while production has decreased. Due to the impact of COVID – 19, experts predict that the practical use of pepper will change.

Overview about Vietnam pepper export activities

Vietnam is the world’s largest pepper production and exportation which accounted for 40% of the world’s output and supplied 60% of the world’s demand, far ahead of other pepper exporting countries such as Brazil, Indonesia… Pepper in Vietnam is exported to 80 countries and guaranteed in quality.

Current situation of Vietnam pepper export

The year 2021 marks a recovery of Vietnam pepper after 4 years of struggle. Vietnam pepper export decreased in volume but has the highest value since 2018.

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Vietnam’s pepper exports in the period 2012 – 2021

According to the General Department of Customs, Vietnam exported 260,989 tons of pepper with a 937.9 million USD turnover, an increase of 42% compared to 2020.

Varieties of Vietnam pepper export

In 2021, the volume of Vietnam’s pepper exports decreased for the first time in 6 years, but the value of the pepper industry reached the highest level since 2018 thanks to a sharp increase in prices. Especially, in 12/2021, the structure of Vietnam pepper export continues to change while the percentage of whole-grain black pepper has decreased to 64,2% from about 80% in the past.

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The structure of pepper for export of Vietnam in December 2021

Instead, the proportion of ground black pepper, white pepper, green, pink, red pepper increased significantly.

Prices of Vietnam pepper export

After four years of difficulty, Vietnam’s pepper sector is expected to make a significant comeback in 2021. Since the price of pepper was too low in previous years, people did not pay attention to cultivation, causing many pepper areas to be severely ill, and pepper prices rose significantly. Others switch to other crops because productivity is low. Furthermore, bad weather also results in lowering pepper production in Vietnam.

Related: Worldwide pepper export price and all things to know

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Vietnam pepper export prices

The average Vietnam pepper price reached $3,736/tonne, which is the highest price since 2018. Despite being in the pepper harvest season, pepper prices have risen by 40-44 percent from the beginning of the year, from 51,000 – 53,000 VND/kg in mid-February to 76,000 – 79,500 VND/kg on March 19. The peak time came at the end of October when the price climbed to 90,000 VND/kg, the highest since the end of 2017.

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Vietnam pepper export price in 2021 (Source: IPC)

Following that, the market became considerably calmer in the last two months of the year as exporters gathered adequate export products while Chinese market demand was weaker than projected, and cash flow transferred to the coffee market when coffee prices were low. This item has reached a ten-year high.
Because of the COVID – 19 pandemic, the price of pepper exports has been steadily growing over the last three years, with a significant increase in the last six months of 2021. High production expenses (fertilizers, gasoline, freight charges, etc…) and novel uses of pepper, in addition to supply-demand dynamics, will drive pepper prices in 2022.

Production activities of Vietnam pepper export

The Ministry of Agriculture and Rural Development reported that Vietnam pepper cultivation area in 2020 was 130,000 ha, a decrease of 10.200 ha compared to 2019. The following are the percentages of pepper-growing areas in Vietnam:

Growing Area Percentage
Gia Lai 10.4%
Dak Lak 25.1%
Binh Phuoc 12.1%
Dong Nai 9.7%
Dak Nong 26%
Ba Ria – Vung Tau 8.1%
Others 8.6%

VPA reported that due to the poor weather conditions and demand-supply mismatch, Vietnam pepper production will drop 25-30% in 2021 compared to 2020. The black pepper production will reach 162,000 MT in 2021 which reduces 25% compared to 2020. Because of several inevitable factors, many households are reluctant to grow pepper.
The General Statistics Office of Vietnam reported that the Central Highlands and Southeast regions accounted for 95% of total output and productivity, while the North Central and South Central Coast accounted for roughly 5%.

Vietnam pepper import markets

In 2021, Vietnam has exported pepper to more than 80 countries and territories around the world. In which, the US is the largest export market, accounting for 22.7%, with 59,278 tons, worth nearly 229 million USD, up 6.3% in volume and 60.6% in value. Thus, the amount of Vietnam pepper export to the US market has continuously increased in the past 4 years. The top countries that import pepper from Vietnam were:

Countries 2020 2021
U.S 19.5% 22.7%
China 19.6% 14.7%
UAE 4.6% 6.0%
India 4.3% 4.7%
Germany 3.8% 4.5%
Pakistan 3.5% 3.9%
Holland 2.8% 3.9%
Others 41.8% 39.6%

The proportion of Vietnam pepper market in 2020 and 2021
(Source: General Department of Customs and VPA)

  • U.S: The demand for this spice in the US market is tending to increase due to consumption in dishes and cosmetics. The US also sharply increased pepper imports from India, Indonesia, China, South Africa… but the volume was much lower than that of Vietnam.
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Pepper in the U.S

  • China: Vietnam peppers were imported in 2020 largely due to the low price as the average pepper price increased from 2.3756 USD/kg to 3.6469 USD/kg. The decrease in the proportion of pepper exported to China decreased due to China’s Zero COVID policy, which caused obstacles to Vietnam’s agricultural export activities in the land border.
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Pepper in China

  • UAE: The UAE is one of Vietnam’s 10 largest importers globally and its biggest trade partner in the Middle East and Africa.
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Pepper in UAE

Elements affecting Vietnam pepper export price

Traders should notice several factors including the demand, supply volume, sea freight rates, and government policies to get a better price when trading.

Demand

The price of Vietnam pepper export has recently risen as a result of a demand surplus compared to supply volume. The pepper export price has grown dramatically in 8/2021, due to the ease of social distancing orders in various EU nations, as well as increased demand during special holidays such as Christmas and New Year.

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Black pepper demand

Supply volume

Years Production
2017 200,000
2018 230,000
2019 260,000
2020 240,000
2021 180,000

Because of the impact of the irregular climate, which causes the harvesting season to be postponed, the pepper production volume has decreased. Furthermore, during the Covid-19 pandemic, transportation restrictions delayed the delivery of pepper to consumers. As a result, pepper prices varied, creating traders difficulty.

Sea freight rates

According to data from consultant firm Drewry World, freight charges from Asia to the United States have been declining in recent weeks. Global sea freight prices are starting to fall, which is great news for the Vietnamese pepper industry, as rising freight costs have had a significant impact on export businesses in recent years. VPA claimed at the beginning of the third quarter of this year that shipping freight costs were excessively high, placing pepper exporters at risk of losing clients or going out of business. Because freight rates were excessively expensive, the port was inundated with commodities, and export promises could not be met. The freight rates benefit pepper exporters while also lowering expenses for customers importing Vietnamese pepper.

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Black pepper affected by sea freight rates

Government policies

The United States accounts for 20-25 percent of annual export volume and has consistently maintained purchasing power in the past. Furthermore, in the context of free trade agreements aimed at expanding the purchasing power of this market, the EU is a critical market and a target market for most businesses. Pepper exports to the EU, on the other hand, encounter severe obstacles due to strict food safety standards. This has a big impact on Vietnam pepper export to this market. In addition, Vietnam has signed a number of trade agreements with other countries across the world, providing the framework for the country’s pepper export markets to grow. The export price of pepper to certain markets will be cheaper than in areas that do not sign trade agreements due to advantageous tariffs provided by trade agreements.

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Government policies

Future prediction on Vietnam pepper export

In terms of market prospects, the US will continue to be the largest pepper export market of Vietnam in the coming years. Vietnam’s pepper is quite popular with the US market as imports have increased continuously in recent years despite the impact of the COVID-19 epidemic.

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Future prediction on Vietnam pepper export

Vietnam export pepper and domestic prices are expected to rebound in 2022 as a result of improved market demand, whereas global pepper export supply steadily narrows due to lower investment in pepper during the low pricing period and erratic climate consequences.

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Future prediction on Vietnam pepper export

Furthermore, in 2022, high freight prices to Europe and the United States, a shortage of empty containers, and congestion at seaports throughout the world will also be a worry for Vietnamese pepper exports.

Vietnam pepper export: Top 3 world’s prestigious suppliers

The top 3 reliable Vietnam pepper export companies include:

Hanfimex

In Vietnam, Hanfimex Group is a major producer and exporter of foods and spices such as cashew, pepper, cinnamon, coffee, and coconut. With over 17 years of expertise and a prominent loyal customer base, Hanfimex is regarded as one of the greatest agricultural exporting enterprises in the world. The Ministry of Industry and Trade recognizes Hanfimex as a respectable customer network.

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Hanfimex

K-Agriculture

K-Agriculture, a Vietnam pepper exporter, was founded in 1996 by Mr. Danieal Nguyen Trong Quy, a brilliant leader. The Vietnam Ministry of Industry and Trade has given the firm authority, enhancing the company’s competitive advantages in providing high-quality products to the international market. K-objective Agriculture’s for the next decade is to be the Top 10 Agriculture Company in Southeast Asia and the Top 100 Agriculture Expert in the world, with a focus on RICE, COFFEE, CASHEW, and SPICES from Vietnam.

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K-Agriculture

For more information, contact us:
Website: https://k-agriculture.com/
Email: info@k-agriculture.com
Phone/Whatsapp: +84855555837

Nedspice

Nedspice Vietnam Spices Processing Enterprise Limited is a 100% Dutch-owned FDI company in Vietnam. This company focuses on pepper and agricultural product production and export. Pepper, cinnamon, anise, turmeric, garlic, onion, cloves, and other spices are among the main goods. Products are currently being exported to Asia, Europe, and other markets.

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Nedspice

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