Explain the reason for the sharp drop in pepper prices?

Today, November 13, 2024, pepper prices in the Southeast region of Vietnam have sharply decreased by 2,000-2,200 VND/kg in most key areas, trading around 138,000-139,000 VND/kg; the highest purchase prices are in Dak Nong, Dak Lak, and Binh Phuoc provinces.

Accordingly, the price of pepper in Dak Lak is being purchased at 139,000 VND/kg, a decrease of 2,000 VND/kg. The price of pepper in Chu Se (Gia Lai) is being purchased at 138,000 VND/kg, a decrease of 2,000 VND/kg. The price of pepper in Dak Nong today is recorded at 139,000 VND/kg, a decrease of 2,200 VND/kg.

In the Southeast region, pepper prices today fluctuated compared to yesterday. Specifically, in Binh Phuoc, the price remained stable at 139,000 VND/kg. In Ba Ria - Vung Tau, the price is currently at 138,000 VND/kg, a decrease of 2,000 VND/kg.

Pepper prices today, November 13, 2024: Explaining the reasons for the sharp drop in pepper prices across the board.

Thus, domestic pepper prices today fell sharply in key pepper-growing regions. The highest price reached 139,000 VND/kg.

Today's world pepper prices

According to the International Pepper Association (IPC), at the close of the most recent trading session, the IPC listed Indonesian Lampung black pepper at US$6,518/ton, down 0.60%, and Muntok white pepper at US$9,122/ton, also down 0.60%.

Brazilian ASTA 570 black pepper is priced at $6,000/ton, down 5.00%. Malaysian ASTA black pepper is priced at $8,500/ton; Malaysian ASTA white pepper is priced at $11,000/ton.

Specifically, the price of Vietnamese black pepper dropped sharply to $6,200/ton for the 500 g/l variety, down 4.84%; $6,500/ton for the 550 g/l variety, down 4.62%; and the price of white pepper was $9,400/ton, down 1.06%.

Mr. Hoang Phuoc Binh, Vice Chairman of the Chu Se Pepper Association (Gia Lai), said that the drop in pepper prices in Vietnam is due to Indonesia having just started its harvest season. On the other hand, because it is the beginning of the coffee harvest season, many dealers are taking advantage of the opportunity to sell off their pepper stocks to buy coffee.

Mr. Binh predicted that the price of pepper in the 2025 crop will be higher than in the 2024 crop (which peaked at 160,000 VND/kg). The primary reason is that the prolonged heatwave at the beginning of 2024 is significantly affecting pepper plant yields, leading to a further decrease in production in 2025.

Not only in Vietnam, but also in many other countries, production is projected to decrease. Meanwhile, most pepper growers in Vietnam currently have other sources of income from coffee, durian, etc., so they are not in a hurry to sell after harvesting and will wait until they see better prices before selling.

According to pepper processing and exporting businesses, Vietnam currently has very low pepper inventories, while the 2025 harvest is expected to be delayed by 1-2 months and production will decrease due to drought.

This will create a certain shortage in supply, which will positively impact world pepper prices.

Indonesia has just finished its 2024 harvest, with abundant supply and continuously falling prices, creating favorable conditions for businesses to take advantage of the situation and purchase. Besides Indonesia, Vietnam also prioritizes importing from neighboring countries such as Cambodia to save on transportation costs, instead of importing from distant sources like Brazil.

Domestic pepper prices on November 13, 2024