How Vietnam Became The World’s Largest Pepper Exporter

Regardless of whether you have a wagyu or sirloin, steak won’t taste as good if there’s no black pepper as the counterpoint of salt. And it has the same effect even when cooking the most straightforward fish fry and ordinary soups.

Known for its uncanny ability to make people sneeze, black pepper is an unripe fruit that is dried and cooked to procure a spicy heat. And today, black peppercorns are 20% of the world’s total spice trade and are primarily grown in Vietnam.

Since most of the world’s black pepper comes from Vietnam, it doesn’t come as a surprise for the country to generate 44.2% of the $2.1 billion pepper export revenues worldwide.

International Trade Center’s (ITC) January to November statistics show that Vietnam made $950 million in revenue from exporting pepper. The country also owns the top spot among the world’s pepper exporting countries, as ITC mentioned at the seminar hosted by the Vietnam Pepper Association on Wednesday to promote the export of Vietnamese pepper and other spices under the European Union-Vietnam Free Trade Agreement (EVFTA).

During the first 11 months of 2022, Vietnam shipped more than 212,000 metric tons of pepper to over 80 countries and territories, including over 183,000 metric tons of black pepper and nearly 28,000 metric tons of white pepper.

However, while Vietnam’s export numbers are higher compared to its global competitors, the total volume of the country’s pepper exports fell 14.9%, or over 37,000 metric tons, compared to the same period in 2021. Still, the country’s pepper export revenue rose 3.9%, or $34 million, year on year.

Hoang Thi Lien, chairwoman of the Vietnam Pepper Association, told the local media at the seminar that “Enterprises should improve their capacity and change their operations in order to meet importing markets’ requirements on technique, quality of products, and human resources so that they overcome obstacles and ship pepper to large markets.”

This year alone, Vietnam expects to export 220,000 metric tons of pepper, allowing it to rake in an estimated $962 million, accounting for 55% of the world’s pepper output. In 2021, the country sold nearly 263,692 metric tons of pepper worth $948.7 million to other countries, VnEconomy reported.

The country’s total pepper output reached 175,000 metric tons this year, down by 10% from last year’s, according to the Vietnam Pepper Association.

Like coffee plants, peppercorns can only thrive in hot, humid tropical climates — ideally, temperatures ranging from 10 to 35 degrees Celsius — so the world relies on countries like Vietnam to feed their black pepper obsessions.

In addition, the plant thrives in areas with high humidity and light winds. Numerous pepper-growing areas in Vietnam produce a large amount of black pepper. And besides the central highlands and the southeast part of the country, Phu Quoc’s pepper has a distinct aroma and flavor in its natural state. It’s grown primarily in the hills and mountains of the tourist-magnet island.

Vietnam’s competitive advantages

Only four Asian countries - Japan, South Korea, Singapore, and Vietnam - have inked free trade agreements with the European Union, according to the Vietnam Pepper Association. It means Vietnam has a distinct advantage over its pepper-producing competitors in the region, such as Indonesia, India, and Malaysia.

Thanks to the EVFTA, commercial activities between Vietnam and the EU have significantly increased. With the trade agreement, the black pepper export tariff is reduced by 99%, allowing the country to put lower price tags on its exports.

Since EVFTA took effect in August 2020, other Vietnamese spices, such as pepper, chili, clove, and vanilla, have enjoyed zero-tax rates.

Vietnamese black pepper’s distinct quality is out of the question. Experts say it is peppery as pepper should be, with a fresh layer of flavor. The question is, what makes pepper from Vietnam superior that it landed on top as the world’s largest exporter?

Besides reaping the positive impact of the EVFTA, Vietnam’s increasing production and the stability of the quantity the country is able to produce through the years have played a major role in affirming its position in the global market.

According to a report from K-Agriculture, the growing acres increased continuously from 51.300 ha in 2010 to 140.200 ha in 2019. The acreage of pepper cultivation reached its peak in 2017 with 152.000 ha. With a large growing area, the Vietnam black pepper quantity has remained stable throughout the years.

The intercropping of pepper and coffee also helps improve the quality of both globally-exported products.

“The Vietnam black pepper has huge, firm, spicy, and aromatic,” reads the K-Agriculture article. Not only that, the pepper in Vietnam is sun-dried to a humidity level of 13% without overcoming any chemical process. And farmers carefully eliminate low-quality seeds to help the pepper to be suitable and meet all export criteria in the global market.

The EU and the US are the largest importers of black pepper in the world — they account for one-third of the total pepper imports. And with top-class quality, ideal weather, fertile soil for growth, as well as FTA advantages, Vietnam intends to stay on top for the years to come.