High quality: Green pepper berries ready for harvest in Sarawak. Malaysian pepper commands the highest export price among major producing countries.
KUCHING: Global pepper prices, which experienced an unexpected big spike in mid-2024, are expected to rise further this year due to continued declining production and as demand far outstrips supply.
“Currently, there is a very short supply of pepper in the market worldwide and demand is expected to increase further or remain stable. This will continue to drive up the prices.
“If China (a major pepper consumer which imported a small volume in 2024) increases its buying, it will further spike up the prices. I am very bullish about pepper prices this year and in 2026,” said experienced trader William S C Yii.
Yii, who is director of leading pepper exporter, Nguong Aik Kuching Sdn Bhd, told StarBiz that domestic pepper prices have risen about 10% since the beginning of the year after posting strong gains in 2024.
“Pepper prices have gone up slowly and steadily since January and this is a good sign that the prices will stay high for the year.
“Experienced traders and farmers are holding onto their stocks like gold, and they are still waiting to sell at higher prices,” he said.
Yii said between May and July 2024, global pepper prices suddenly soared, with average black pepper hitting nearly US$10,000 per tonne and white pepper reaching US$13,000 per tonne.
Before the spike, black pepper was trading in the range of US$6,000 to US$7,000 per tonne, and white pepper at US$8,000 per tonne.
He said in anticipation of a production and supply shortfall, pepper importers in the United States and Europe, who had anticipated global prices to rise further, had bought aggressively to stockpile, driving up prices unexpectedly due to panic buying.
Then, a swift price correction set in, pulling back average global black pepper prices to between US$6,800 and US$7,000 per tonne and white pepper to US$8,000 per tonne.
The average black pepper is currently trading at about US$7,800 per tonne and white pepper at US$9,800 per tonne.
Malaysian pepper commands the highest export price among major producing countries.
According to the International Pepper Community (IPC), on Feb 13, Malaysia’s black pepper fetched US$9,000 per tonne versus Vietnam’s US$6,650 per tonne, Brazil’s US$6,800 per tonne and Indonesia’s US$7,258 per tonne.
Malaysia’s white pepper, meanwhile, stood at US$11,600 per tonne as opposed to Vietnam’s US$9,550 per tonne and Indonesia’s US$10,019 per tonne.
According to Yii, Malaysia’s pepper marketed under the brand name Sarawak Pepper fetches a premium in the global market because of its superior quality.
There is a wide gap of about US$1,000 per tonne between Malaysian and Vietnamese pepper.
IPC noted global pepper production fell by about 22,000 tonnes or 4% last year as compared with 2023, mainly due to declined harvests in Brazil and Vietnam, the world’s leading spice producing countries.
The extreme dry weather in Brazil and decreasing pepper acreage in Vietnam (the world’s largest producer and supplier) were the main reasons for declining world production. Indonesia also reported lower production output for the year.
Due to depressed pepper prices, many Vietnamese farmers have in recent years shifted from pepper planting to cultivation of coffee and cocoa due to their attractive prices, and even durian, with the strong export market in China, said Yii.
The IPC had projected 2024’s global production at an estimated 465,000 tonnes versus demand of 529,000 tonnes, and this drove a further decrease in overall global stocks to an estimated 428,000 tonnes, well below global demand.
Going into 2025, the IPC forecasts that global production will continue to decline due in part to the lower economic efficiency of pepper compared to other crops, leading to many farmers no longer choosing pepper as a primary crop.
Other factors affecting production are extreme climate, which has reduced pepper yields while production costs have risen significantly.
Meanwhile, Vietnam Pepper and Spice Associations chairman Hoang Thi Lien is upbeat about the 2025 global pepper market, as production is expected to continue to fall and extreme weather conditions have reduced pepper productivity in many countries.
She said Vietnam exported 250,600 tonnes of pepper of all kinds in 2024 worth more than US$1.3bil, up 44.4% in value as compared to 2023, with shipments of black pepper accounting for US$1.1bil and white pepper US$200mil.
The average export price of Vietnamese pepper in 2024 reached a record high of US$5,280 per tonne. Vietnam’s pepper production now accounts for about 60% of the world’s total demand.
Hoang also said in 2024, the United States was Vietnam’s largest pepper export market, absorbing 72,311 tonnes (28.9% of total exports), marking a 33.2% increase from 2023, followed by the United Arab Emirates or UAE, Germany, the Netherlands and India.
China, which imported little pepper from Vietnam last year, is expected to increase purchases as soon as Vietnam begins its main harvest season this month.
Some industry analysts have predicted a 40% to 50% upside potential for Vietnamese pepper prices from the current levels.
In her 2025 new year message, IPC executive director Firna Azura Ekaputri Marzuki said 2025 promises to be a year of even greater opportunity.
“Challenges remain for the IPC along the way.
“IPC ought to stay the course and stand united to weather the current tide of complicated developments, such as the global situation ranging from the instability of pepper prices, disruptions in logistics, and stringent rules and regulations for pepper trade to climate change and many others.
“IPC ought to ensure its role as an effective player in the development of the global industry,” she added.
In 2024, Malaysia’s pepper production was estimated at about 30,000 tonnes, out of which more than 95% came from Sarawak, with Betong overtaking Kuching as the top supplier.
Based on the Malaysian Pepper Board or MPB’s daily published pepper prices on Feb 14, Betong Grade 1 black pepper fetched RM30,000 per tonne whereas Grade 1 white pepper reached RM40,000 per tonne.
Betong pepper now commands the highest price among regions in Sarawak, as compared to Kuching Grade 1 black pepper (RM27,300 per tonne) and white pepper (RM36,700 per tonne).
Yii said in order to obtain supply, most traders are forking out more – RM32,000 and RM42,000 per tonne for Betong Grade 1 black and white pepper respectively – as there is limited supply in the Kuching, Serian and Lundu regions.
The belt from Sri Aman to Betong, Bintangor, Sarikei, Julau and Kanowit in the central region has increased pepper production and become more dominant in pepper trading activities.
Domestic black and white pepper hit their all-time highs of RM30,000 and RM50,000 per tonne, respectively, in 2016, and then entered into a lengthy consolidation period until 2022.
Prices started to recover in 2023.
