The global pepper market is demonstrating remarkable resilience in the face of tightening supplies and shifting trade flows in 2025. Vietnam, the world’s leading pepper exporter, recently completed its harvest with a crop size of 180,000 tons, which is 10,000 tons lower year-on-year. This constrained supply stems from a combination of reduced new plantings and lingering impacts of previous low-price cycles. Vietnamese exports in the first half of August tallied 10,830 tons, slightly down in volume but up in value, reflecting firm prices. While U.S. importers—the key buyers—are scaling back purchases from Vietnam (down 18% between January and May), they continue to supplement with supplies from Indonesia and India. Nevertheless, Vietnam retains a commanding 64.4% share of the U.S. import market.
Short-term challenges, including countervailing duties in the U.S. and slow European buying, have aligned with robust demand fundamentals in the long run. Prices remain elevated and are likely to firm further as Q4 approaches, given the need for buyers to rebuild inventories before the seasonal uptick in consumption. Export earnings are expected to remain stable (€1.3 billion forecast), even with lower volumes, due to strong underlying global prices driven by tightening inventories and a cautiously optimistic demand recovery.
Exclusive Offers on CMBroker
Pepper
black 600 g/l, clean
FOB 6.43 €/kg
(from VN)
Pepper
black 550 g/l, faq
FOB 6.05 €/kg
(from VN)
Pepper
black 550 g/l, clean
FOB 6.12 €/kg
(from VN)
📈 Prices
| Product | Origin | Specification | FOB Price (EUR/t) | Weekly Change | Market Sentiment |
|---|---|---|---|---|---|
| Pepper Black 600g/L, Clean | Vietnam | 600g/L, Clean | 6.38 | 0% | Bullish |
| Pepper Black 550g/L, FAQ | Vietnam | 550g/L, FAQ | 6.00 | 0% | Bullish |
| Pepper Black 550g/L, Clean | Vietnam | 550g/L, Clean | 6.08 | 0% | Bullish |
| Pepper Black 500g/L, FAQ | Vietnam | 500g/L, FAQ | 5.80 | 0% | Firm |
| Pepper Black 500g/L, Clean | Vietnam | 500g/L, Clean | 6.10 | 0% | Firm |
| Pepper Black, 5 mm, Extra Bold | Vietnam | 5 mm, Extra Bold | 6.50 | 0% | Bullish |
Note: All prices are quoted FOB Hanoi, Vietnam, as of Aug 14, 2025. Market sentiment remains bullish amid tight supply and firm demand in Asia and the West.
🌍 Supply & Demand
- Vietnam’s 2025 harvest: 180,000 tons (down 5% YoY)
- Export (Jan–Aug 2025): Volume 0.2% lower MoM in August, but value up 2.1% due to higher price realizations
- US buyers shifting procurement: US imports down 18% from Vietnam; Indonesia and India gained market share
- Vietnam still dominates US supply: 64.4% of US imports in H1 2025
- Countervailing duties anticipated to impact exports during Q3 2025
- Export Forecast 2025: 220,000 tons (vs. 250,000 tons in 2024), but export value holding steady at ~EUR 1.3bn
- Firm prices in Q4 2025 expected, as global demand recovers and stocks rebuilt
📊 Fundamentals
| Country | 2024 Output (tons) | 2025 Output (tons) | 2025 Projected Exports (tons) | Comments |
|---|---|---|---|---|
| Vietnam | 190,000 | 180,000 | 220,000 | Declining output; lower new plantings; still dominant exporter |
| India | 67,000 | 65,000 | 18,500 | Benefiting from some US/Europe demand shift |
| Indonesia | 85,000 | 83,000 | 48,500 | More aggressive in export market as Vietnam volumes decline |
| Sri Lanka | 21,000 | 22,000 | 9,000 | Small, niche origins; specialty grades |
🌦️ Weather Outlook
- Vietnam (Central Highlands): Ongoing monsoon, with ample rainfall maintaining soil moisture. Favorable vegetative conditions, but risks of localized flooding could impair late crop quality.
- India (Kerala): Normal monsoon so far in 2025; aiding crop establishment, early yield estimates unchanged.
- Indonesia (Lampung & Sulawesi): Above-average rainfall this season, good soil moisture, though some concerns over pest/disease outbreaks late in season.
Overall, the weather outlook supports current yield estimates but localized risks remain. Watching for possible late blight or fungal infestations in wetter-than-average zones.
📌 Key Drivers & Market Summary
- Supply: Vietnam’s 2025 crop is smaller, reflecting falling new planting and adverse weather in recent years.
- Demand: Firm across key importing regions, especially as buyers anticipate tighter Q4/Q1 supplies.
- Trade Policy: US countervailing duties may pressure short-term exports but are likely to drive inventory rebuilds in Q4.
- Prices: Remain well bid and are expected to trend higher by year-end, supported by strong demand and tight inventories.
- Stocks: Global inventories lower YoY with Vietnam’s dominance unchallenged despite short-term market share gains by India and Indonesia.
🧭 Trading Outlook
- For Exporters: Hold for potential higher pricing in Q4 as buyers restock; monitor US and EU regulatory developments closely.
- For Buyers: Consider covering Q4 requirements sooner rather than later; risk of higher prices as inventory levels diminish.
- For Speculators: Bullish bias advised in the near-term; opportunities in volatility due to policy changes and weather-driven supply updates.
- Watch for: Any late season weather disruptions in Vietnam and Indonesia, which could amplify price volatility.
📆 3-Day Regional Price Forecast (FOB, EUR/t)
| Date | VN Black 600g/L, Clean | VN Black 550g/L, FAQ | VN Black 550g/L, Clean |
|---|---|---|---|
| Aug 15, 2025 | 6.39 | 6.01 | 6.09 |
| Aug 16, 2025 | 6.40 | 6.02 | 6.10 |
| Aug 17, 2025 | 6.41 | 6.03 | 6.11 |
Prices are projected to extend gains through the weekend on the back of strong demand and limited new supply.
