Vietnam takes lead in Thailand's fast-growing pepper trade
Thailand is importing more pepper from Vietnam as food and tourism demand rises, while tighter global supply helps keep prices elevated.
- Vietnam supplies approximately 99.63% of all pepper imported by Thailand, establishing a dominant position in the market.
- In the first two months of the year, Thailand's pepper imports from Vietnam surged by 125% in volume and 104% in value, making it the third-largest buyer.
- Thailand's heavy reliance on Vietnamese pepper is driven by strong demand from its food and tourism industries, coupled with limited domestic production.
Vietnam’s pepper exports rose more than 30 per cent in the first two months of the year, with Thailand emerging as a standout market due to surging demand and heavy reliance on the Vietnamese supply.
According to the Department of Customs, Vietnam shipped 35,600 tonnes of pepper worth over US$231 million in the first two months of this year, up 30.8 per cent in volume and 25.6 per cent in value year on year.
The growth came amid supportive global conditions, including forecasts of a 15–20 per cent decline in world supply as inventories fall in major producing countries while demand continues to recover. The US is expected to increase imports after tariff reductions, and China is also stepping up purchases due to low stock levels.
Domestic pepper prices remained high at around VND136,000 (nearly $5.2) per kilogramme on Sunday, helping farmers maintain positive profit margins. The average export price recovered to $6,609 per tonne in February, although the two-month average still slipped 4 per cent year on year to $6,499 per tonne.
The US remained the largest buyer, accounting for more than 25 per cent of total export value at nearly $66 million, followed by Germany with close to $15 million. Thailand ranked third after a sharp increase in imports, purchasing 1,940 tonnes worth over $14 million, up 125 per cent in volume and 104 per cent in value.
Data from Thailand’s Ministry of Commerce show pepper imports rising steadily from 5,990 tonnes in 2020 to 9,652 tonnes last year, an average annual increase of about 10 per cent. Vietnam now supplies about 99.63 per cent of Thailand’s imported pepper, driven by strong demand from the food and tourism industries and limited domestic production. The market is also building inventories amid tightening global supply.
With farmers selling cautiously in anticipation of further price gains and supply yet to expand significantly, pepper prices are expected to remain firm in the medium and long term, offering Vietnamese exporters opportunities to expand their presence in fast-growing markets such as Thailand alongside traditional destinations in the US and Europe.
VNS
