Prices dropped by 5,000 - 6,000 VND/kg compared to the same time yesterday. The domestic market continues to decline, mainly due to new U.S. countervailing tax policies.

Market Insights:
According to the Vietnam Pepper and Spice Association (VPSA), with the possibility of U.S. tariffs on Vietnamese imports — including pepper and spices — some U.S. importers have asked Vietnamese exporters to delay shipments and avoid signing new contracts. Other unrelated markets are also withholding new contracts, waiting for prices to fall if tariffs are applied.

This has directly affected domestic production, causing inventory build-up, liquidity issues for exporters, and raw material purchasing disruptions.

Currently, there is no confirmed percentage for U.S. tariffs on pepper and spices, except that the minimum rate will be 10%. VPSA warns businesses to prepare for possible tariffs ranging from 10% to a maximum of 46%.

Recommendations:
VPSA is urging the government to implement supportive financial policies, including preferential interest rates for agricultural exporters to the U.S., temporary credit packages for stockpiling, and risk insurance for delayed or postponed orders.

VPSA also highlights that domestic logistics costs, especially for road transport and cold container services, are currently the highest in ASEAN, severely affecting price competitiveness. They propose that relevant ministries consider waiving or reducing warehouse and port infrastructure fees and subsidizing domestic transportation costs during this period of political uncertainty.

Global Market:
As of the latest session, the International Pepper Community (IPC) listed:

Coffee exports
In the first quarter of 2025, high export prices helped Vietnam’s pepper industry maintain positive export value growth despite a decline in export volume. However, new U.S. tariff policies have raised serious concerns among exporters about potential future losses.

According to preliminary data from the Vietnam Pepper and Spice Association (VPSA), Vietnam exported 20,244 tonnes of pepper in March, earning 141.6 million USD. Compared to February, export volume increased by 41.3% and value by 45.6%. Year-on-year, volume fell by 21.2%, but value rose by 27.9%. The average export price in March was 6,790 USD per tonne for black pepper and 8,802 USD per tonne for white pepper, up 122 USD and 268 USD respectively compared to the previous month.

Overall, in the first quarter of 2025, Vietnam exported 47,660 tonnes of pepper, generating 326.6 million USD. This represents a 16.1% decrease in volume but a 38.6% increase in value compared to the same period in 2024. The average export price for black pepper during this time reached 6,711 USD per tonne, up 94.9% year-on-year, while white pepper rose 73.9% to 8,617 USD per tonne.

The United States remained Vietnam’s largest export market, although export volume to the U.S. dropped 32.6% year-on-year to 10,278 tonnes. Other major markets included India (3,370 tonnes, down 11.2%), Germany (3,358 tonnes, down 9.3%), and the United Arab Emirates (2,757 tonnes, up 15.2%).

On the import side, Vietnam brought in 9,686 tonnes of pepper in the first three months of the year, valued at 55.7 million USD, an increase of 21.3% in volume and 88.8% in value year-on-year. Brazil was the largest supplier, accounting for 4,363 tonnes, roughly the same as last year. Indonesia followed with 3,707 tonnes, up 385.2%, while imports from Cambodia dropped by 64.7% to 735 tonnes.

Despite promising export value growth, the recent announcement by U.S. President Donald Trump to impose a 10% base tariff on all imports, along with a 46% reciprocal tariff specifically on Vietnamese goods, has caused significant concern among pepper exporters. Pepper is one of Vietnam’s key agricultural exports, with a strong presence in the U.S. market.

Le Viet Anh, Chief of the VPSA Office, noted that Vietnam is currently the largest pepper supplier to the U.S., accounting for 77% of total U.S. pepper imports. In 2024, Vietnam exported 72,311 tonnes of pepper to the U.S., up 33.2% from the previous year, generating 409 million USD, or 31% of Vietnam’s total pepper export value.

Anh emphasized that the new 10% tariff has created major challenges for Vietnamese exporters. Many businesses signed long-term contracts with U.S. importers earlier this year, with delivery dates extending into August and September. These contracts, signed before the tariff announcement on April 2, did not account for the new 10% duty, making the risk of financial losses significant.

In response, some businesses are considering renegotiating their contracts with U.S. partners to share the additional costs. As for the 46% reciprocal tariff on Vietnamese goods, the exact application details remain unclear.

The pepper industry is actively studying the new tariff regulations to formulate appropriate response strategies. Exporters remain hopeful that ongoing negotiations between the Vietnamese and U.S. governments will result in a favorable outcome, with pepper exports potentially only subject to the 10% base tariff without further penalties.

T.Huong

Source: Vitic