June 2025 – Market Overview

Black pepper prices are rising significantly as less is available in the world. This is largely due to reduced production in exporting countries and tariffs that the U.S. is going to impose. The American Spice Trade Association (ATSA) observes that Vietnam, the largest exporter, has experienced a significant decline in production. The decline is largely due to shifts in the way people cultivate pepper following the decline in prices in 2018. As it takes several years to cultivate the vines, the reduced planting is still impacting current harvests.

There are additional supply issues due to unfavorable weather in Indonesia, India, and Brazil. Droughts as well as irregular rainfall have lessened the planting capabilities as well as the quantity of crops. Shipping prices are also higher, as well as lingering supply chain issues related to the COVID-19 pandemic.

Prices and Trends in Various Locations

• Vietnam (500–550 g/L grade): It has now increased to around $6.10–$6.80 per kilogram, an increase of around 9–12% since January 2025.

Brazil (ASTA 570 quality): Prices are slightly higher, from $6,400 to $6,800 per ton, due to persisting production difficulties.

• Indonesia and Malaysia: Prices remain high—Indonesia at around $7,300 per tonne, and Malaysia at around $9,200 per tonne.

Underlying Drivers of Price Increases

1. Production weather risks: Abnormal rain and dry seasons have impacted pepper cultivation in both Asia and South America.

2. Trade protection measures: The United States is set to impose a 46% retaliatory tariff on Vietnamese pepper, anticipated to further strain supply and raise costs for importers.

3. Logistics and supply chain pressures: Pandemic-era disruptions, rising shipping rates, and inventory constraints have compounded supply limitations.

Short-Term Perspective

Prices are likely to continue increasing unless significant additional supply arrives in the market. Replanting in Vietnam and elsewhere can balance things to some degree, but that is unlikely to happen until after the late part of 2026 or even beyond. Throughout the coming few months, markets will be monitoring weather forecasts as well as harvesting plans intensely.

Planning Advice

Participants Recommendations provided

Importers/Buyers: Consider securing future contracts now to hedge against further price increases.

Exporters/Farmers Holding inventory may be advantageous while prices remain elevated.

Retailers explore promotional strategies highlighting alternative spices to offset higher pepper costs.

Market Analysts Track climate conditions, planting reports, and U.S. tariff implementation timelines quarterly.

Conclusion

Black pepper markets will have fewer supplies by the middle of 2025 since production is down. The issue is aggravated by new trade tariffs and late shipments. Prices will likely remain high throughout the year if the supply does not significantly recover. The elevated prices may spill over to 2026.