Where prices stand
As of early July 2026, Vietnam’s FOB export price for black pepper (500 g/l) is moving within a tight band of $6,600 to $6,800 per tonne, according to the International Pepper Community and trade-floor reports. The IPC’s daily price assessment for Vietnamese black pepper 500 g/l stood at $6,100 per tonne on July 1, with subsequent weeks seeing further firming. On the domestic front, farm-gate prices in key growing provinces such as Dak Lak, Binh Phuoc, and Dong Nai have climbed to between 150,000 and 152,500 VND per kilogram, levels that growers have not enjoyed in recent memory.
These figures represent a sharp increase over 2024 averages and confirm that the structural supply deficit that emerged in 2025 has carried through into 2026 with additional momentum. For context, Vietnam’s average black pepper export price in the first half of 2025 was around $4,789 per tonne; the current FOB range is roughly 35–40% above that baseline.
Why supply is tight
The rally is fundamentally driven by a reduction in available supply, not by speculative demand. The Vietnam Pepper and Spice Association (VPSA) has forecast that the country’s 2026 pepper output will decline by 15–20% to approximately 165,000 tonnes, down from an estimated 195,000–200,000 tonnes in prior years. Planted area in the Central Highlands — the heart of Vietnam’s pepper belt — has been shrinking as farmers switched to more profitable crops such as durian and coffee during the low-price period of 2022–2023, and the trees that remain are ageing, with many beyond peak productivity.
The weather has compounded the problem. Poor monsoon rainfall in late 2025 and early 2026 affected berry development in Vietnam, India, and Brazil — the world’s three largest producers. Global pepper supply in 2026 is projected to fall by 15–20% overall as a result, according to multiple trade-body estimates. With inventories already drawn down during the 2024–2025 season, there is limited buffer to absorb the production shortfall, keeping upward pressure on prices.
On the demand side, the picture is mixed. Some importers have reduced volume commitments at current price levels, particularly in price-sensitive food-processing markets, which has prevented the rally from accelerating further. However, demand from the spice and seasoning segment has held comparatively firm, and the overall market balance remains in deficit.
Vietnam’s export picture in 2026
Despite the lower crop, Vietnam’s export revenues are on track to surpass last year’s record. In the first quarter of 2026, the country shipped approximately 66,350 tonnes of pepper. May 2026 was particularly strong, with exports reaching 20,140 tonnes worth $75.34 million — up 32% in both volume and value compared with May 2025, according to PTEXIM. June data showed 23,103 tonnes exported, valued at $151.3 million. The year-to-date average export price has settled around $6,460 per tonne for black pepper, reinforcing the view that the market has entered a structurally higher price band.
What buyers should consider
For procurement teams, the current environment calls for a different approach to pepper sourcing than the low-price era of a few years ago. Several factors are worth building into planning:
• Contract timing: with supply expected to remain constrained through the balance of 2026, agreeing volumes early — particularly for Q4 and Q1 2027 shipments — reduces the risk of being priced out as inventories thin further.
• Grade flexibility: price differentials between 500 g/l, 550 g/l and 570 g/l grades have widened. If end-use permits, evaluating whether a slightly lower screen size meets specifications can unlock meaningful cost savings without compromising quality.
• Origin diversification: while Vietnam remains the dominant supplier, limited volumes from Brazil and Indonesia are available at competitive levels. Discussing multi-origin programmes with your supplier can provide supply security and some pricing leverage.
• Price fixation: given the elevated volatility, contracts that allow fixation over a window rather than at a single point can help buyers manage timing risk. At Dong Hai Agri, we structure pepper contracts with flexible fixation terms tailored to each buyer’s risk appetite.
Outlook for the rest of 2026
The Mekong Delta’s summer–autumn crop, typically harvested between June and August, is providing some incremental supply to the market. However, this secondary crop accounts for a modest share of total national output and is unlikely to shift the overall supply–demand balance in a meaningful way. The next major harvest window in the Central Highlands will not arrive until February–April 2027.
Most analysts expect prices to remain firm through the end of 2026, with downside limited by low global stockpiles and upside capped by demand resistance at higher levels. The risk of a sharp correction appears low in the near term, but buyers should remain cautious about building large uncovered positions as the market adjusts to each new data point on crop progress and import demand.
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Sources: International Pepper Community (IPC), Vietnam Pepper and Spice Association (VPSA), Vietnam Customs, PTEXIM Market Update.
Tags: Pepper | Market | Black Pepper