VINAGRI News - Vietnam’s pepper export outlook for 2026 is expected to improve thanks to a global market recovery and rising demand. However, exporters are increasingly concerned about a sharp decline in domestic supply, which could lead to severe raw material shortages and pose significant challenges to the industry’s export targets.
Summary:
> Global pepper supply in 2026 is forecast to fall by 15 - 20%, while demand is expected to recover.
> Vietnam faces declining production, low inventories, and farmer reluctance to sell early in the season.
> Pepper prices are expected to remain high and set a new price benchmark.
> Shrinking cultivation areas and competition from Brazil threaten Vietnam’s global leadership.
> Sustainable farming, stronger farmer–enterprise linkages, and value-added processing are critical for long-term competitiveness.
Rising demand but tightening supply
According to the Vietnam Pepper and Spice Association (VPSA), global pepper production declined in 2025 across many producing countries due to adverse weather conditions. Output fell by 10% in Indonesia, more than 32% in India, and 20% in Sri Lanka compared with 2024.
A report by the Agency of Foreign Trade under the Ministry of Industry and Trade forecasts that global pepper supply in 2026 will drop sharply by 15 - 20%, as inventories in most major producing countries continue to shrink.
Indonesia’s pepper stockpiles have fallen to their lowest level in years, at just 13,000 tonnes. In Vietnam, although 2025 output rose slightly to about 195,000 tonnes, inventories remain limited.
At the annual conference of the Vietnam Pepper and Spice Association, VPSA Secretary General Le Viet Anh said that pepper inventories from the 2022 and 2023 crops have been completely depleted. Current carry-over stocks from the past two years into 2026 are estimated at only around 40,000 tonnes.
In 2025, to meet export demand, Vietnam imported 42,688 tonnes of pepper - up more than 16% in volume and approximately 51% in value year-on-year. In 2026, imports may continue to rise as global demand strengthens while domestic production is forecast to decline by 15 - 20%.
Additionally, exporters are expected to face raw material shortages in the early months of the year, as farmers are reluctant to sell. According to VPSA, Vietnam’s pepper harvest is expected to begin in late February 2026 and last until the end of April. However, farmers are unlikely to sell in large volumes, instead releasing only enough to cover harvesting and fertilizer costs. Those with sufficient financial capacity are likely to store pepper in anticipation of higher prices.
Export prospects improve, but risks remain
The limited supply has raised concerns about a challenging export year for Vietnam’s pepper industry, even as experts predict a recovery in global demand in 2026 - particularly in the U.S. market, following the reduction of pepper import tariffs to zero and increased purchasing by several countries.
VPSA Chairwoman Hoang Thi Lien said that a key positive factor for Vietnam’s pepper exports in 2026 is the recovery of the U.S. market. Growth is also expected from China, where stockpiles are reportedly running low and insufficient to meet domestic consumption demand.
“In 2025, Chinese importers purchased only 20,000 tonnes of Vietnamese pepper - just one-third of the volume seen in previous years. We hope to see stronger participation from this market next year. Orders from other countries are also expected to increase,” Ms. Lien said. “Therefore, companies should start planning now to gradually procure and stockpile pepper, as production in 2026 is expected to decline.”
Experts warn that any prolonged supply shortage could undermine export performance and negatively impact Vietnam’s pepper export targets for 2026.
Pepper loses ground to other crops
Beyond unfavorable weather, another major factor behind the projected decline in output is farmers’ diminishing interest in pepper cultivation.
Hoang Phuoc Binh, former Vice Chairman of the Chu Se Pepper Association in Gia Lai province, noted that although precise figures are unavailable, field observations show that specialized pepper-growing areas have continued to shrink, with new plantings increasing only marginally over the past two to three years.
He explained that between 2018 and 2020, low prices forced many farmers to abandon pepper cultivation. Although some returned to planting in 2021 - 2022, the scale was limited, and growth from 2023 to 2025 remained modest.
“In 2020, pepper prices fell to just VND 34,000 - 35,000 per kg, while production costs were around VND 50,000 per kg. Farmers lost up to VND 15,000 per kg. Combined with adverse weather and pest outbreaks that reduced yields, many farmers gave up pepper farming. Today, only about 20 - 30 out of 100 farmers are willing to replant,” Mr. Binh said.
He added that pepper’s lower profitability compared with crops such as coffee and durian has made it less attractive. As a result, many farmers have shifted to intercropping models, growing pepper alongside coffee, or even combining pepper, coffee, and durian on the same land.
Nguyen Quang Ngoc, Director of the Pepper Research and Development Center, acknowledged that intercropping can improve biodiversity and income per hectare. However, he cautioned that farmers often focus too heavily on short-term economic returns at the expense of sustainable farming practices.
“Planting too many crops without proper technical knowledge can reduce productivity and disrupt balance, while also complicating crop area statistics for local authorities,” Mr. Ngoc said.
Experts generally support intercropping pepper with coffee, which is widely practiced and considered beneficial. However, intercropping pepper with durian is deemed unfeasible. Due to shared pests and diseases, similar canopy heights, and competition for sunlight, both crops may suffer reduced photosynthesis and yields.
“Durian trees reach 7 - 8 meters, while pepper grown on live supports can reach around 6 meters. Similar heights mean they compete for sunlight, leading to poor fruiting for both crops,” said Ms Ton Nu Tuan Nam, a Vietnamese pepper expert. “Without proper techniques, intercropping durian with pepper is likely to fail.”
High prices expected, global leadership at risk
Given the bleak production outlook, experts predict that pepper prices in 2026 will remain high and establish a new, higher price floor for subsequent years, driven by rising global demand and raw material shortages faced by Vietnamese exporters.
VPSA also warned that production challenges could threaten Vietnam’s global leadership in the pepper industry. Although Vietnam is currently the world’s largest pepper producer and exporter, other countries are closing the gap and may surpass Vietnam in the coming years.
“Brazil is the only bright spot in the global pepper landscape for 2026, with expanding acreage and stable output, while most other major producers are seeing declines,” Ms. Lien added. “Brazil’s production in 2025 was already close to 100,000 tonnes, making it a strong competitor.”
To safeguard Vietnam’s position, VPSA urged companies to invest more aggressively in developing sustainable pepper-growing regions, strengthen cooperation with farmers, adopt advanced cultivation practices, and improve yields on existing farmland. At the same time, exporters should enhance value through deeper processing and greater access to premium markets, thereby reinforcing Vietnam’s standing on the global pepper map, according to information from Vietnambiz.
NPK/ Vinagri News
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