Pepper prices fall more than tenfold as Chinese demand slows and transport costs rise

In early April, fresh pepper drying along Truong Sa Street in Quang Ngai increased as prices fell sharply. Residents spread peppers to dry along the roadside for about 2 kilometers, reflecting a broader slowdown in the pepper trade as China reduced imports and high diesel prices forced container trucks to pause.

Prices drop sharply, drying activity rises

Truong Sa Street is the route through An Phu commune, one of the province’s well-known pepper-growing areas, so sidewalks are often used to lay peppers to dry. When prices decline, the amount of peppers being dried along the road typically increases.

Mr. Nguyen Van Anh, who owns a pepper field of about 750 square meters in An Phu commune, said this year’s price fall is unprecedented. Last year, peppers averaged 50,000 dong per kilogram, sometimes above 70,000 dong, helping him earn about 50 million dong from nearly one ton. This year, early-season prices were about 14,000 dong per kilogram, and by April 9 they dropped further to 5,000–7,000 dong per kilogram.

Farmers report costs cannot be covered

In areas along the Tra Bong River in Binh Chuong, Binh Son, Binh Minh, and other localities, farmers described a subdued market. Tran Van Thanh, a pepper farmer, said: “Invested costs about 5 million dong per shao (500 m2), hiring labor about 250,000–300,000 dong per day. With current pepper prices, we cannot cover labor costs.”

China’s reduced demand and higher transport costs weigh on buyers

Traders said Quang Ngai pepper is mainly exported to China via unofficial cross-border routes. Prices fell due to reduced demand from China, combined with higher transportation costs, leading domestic buyers to hold back.

Diesel costs surge raises per-shipment expenses

For transport from Quang Ngai to northern border gates (about 1,000 km), a container truck typically consumes 500–700 liters of diesel per one-way trip. In early April, diesel prices were above 40,000 dong per liter—double the previous year—so each container incurred an additional 12–15 million dong for a one-way trip.

As a result, a round trip from Quang Ngai to the north and back pushed costs up by nearly 30 million dong. By the afternoon of April 9, diesel prices fell to 32,960 dong per liter, helping reduce transport costs, but they remained about 1.5 times higher than last year.

Shipping slows; some delay harvest or switch drying methods

Because of the cost pressure and price uncertainty, the volume of containers carrying fresh peppers was not as brisk as last year. Some households postponed harvests to wait for higher prices, while others switched to sun-drying to store peppers.

Some drivers also parked containers for days to accumulate enough fresh peppers and wait for diesel prices to drop before heading north.

Local agency highlights production structure and market risk

According to the Quang Ngai Department of Planting and Pest Control, the province has a large pepper-growing area. During the winter-spring season, farmers cultivated more than 1,000 hectares, with an average yield of about 21,000 tons per year. However, pepper cultivation is patchy and mostly small-scale, not forming a large centralized production area.

The agency said current pepper prices are unstable because they depend heavily on exports to China, driven mainly by middlemen. There is no stable enterprise to guarantee purchase, which increases risk when China stops importing.

Proposed responses

In response to the price decline, some facilities have stockpiled peppers in cold storage to wait for price increases or have sun-dried peppers for storage.

The department proposed developing larger, centralized production zones, building market information systems to connect farmers with enterprises, and forming a production chain to reduce risk before price fluctuations.