Amid increasingly stringent requirements from import markets on quality, traceability, and sustainable development, strengthening production linkages, elevating product quality, and building a national brand are viewed as urgent solutions to boost value addition for the pepper industry...

Although continuing to maintain its role as the world's leading pepper producer and exporter, Vietnam's pepper industry is grappling with numerous bottlenecks across its value chain, from cultivation and procurement to processing and export.

At a recent kickoff workshop for the Lam Dong Agricultural Commodity Forum, Hoang Thi Lien, President of the Vietnam Pepper and Spice Association (VPSA), stated that Vietnam's pepper output currently averages between 175,000 and 180,000 metric tons per year. Export volume stands at approximately 230,000–250,000 tons, while imports fluctuate between 20,000 and 25,000 tons annually to serve processing and re-export demands. Vietnamese pepper is currently present in more than 120 countries and territories worldwide.

NUMEROUS BOTTLENECKS TO UNTANGLE

According to VPSA reporting data, in the first eight months of 2026, Vietnam exported 190,153 tons of pepper, up 14.2% over the same period in 2025. Asia was the largest consumption market with 88,441 tons, accounting for 46.5% of total export volume. Next was the Americas with 49,830 tons, accounting for 26.2%; Europe reached 40.892 tons, or 21.5%; and Africa absorbed nearly 11,000 tons.

By individual market, the United States remained the largest buyer of Vietnamese pepper, taking 44,349 tons in the first eight months of 2026. China ranked second with 20,495 tons, surging from 13,282 tons in the corresponding period of 2025. Other key markets included the UAE, India, Thailand, Germany, the Netherlands, the Philippines, Egypt, and Hong Kong.

Despite these positive results, Lien noted that the export pepper value chain still suffers from notable limitations.

At the farming stage, smallholders and small-scale cooperatives still account for over 80%, posing significant hurdles to quality control, disease prevention, and standardized production organization. While the sector is trending away from conventional farming toward organic practices and sustainability standards such as SRP, Rainforest Alliance (RA), or GAP, the transition remains slow and uneven across growing regions.

“One of the biggest challenges today is product quality. Pesticide residues, cross-contamination from intercropping, and climate change impacts are directly affecting pepper yield as well as quality. Furthermore, the lack of cohesion among smallholders poses considerable obstacles to synchronized cultivation control.” — Hoang Thi Lien, President of the Vietnam Pepper and Spice Association (VPSA)

In procurement, the network of local collectors and intermediary brokers still plays a dominant role in raw material aggregation. A multi-tiered supply chain inflates logistics costs while hindering traceability and product transparency.

In processing and export, although several enterprises have invested in deep-processing technologies—such as white pepper, ground pepper, pickled pepper, and other value-added items—the share of raw pepper exports remains stubbornly high. Meanwhile, major markets such as the EU, the US, and China are consistently raising standards on food safety, chemical residues, and sustainability, exerting immense pressure on exporters. Certificate of Origin (C/O) procedures and the absence of a strong national brand also dampen the sector's competitive standing.

ACCELERATING DEEP PROCESSING AND SUPPLY CHAIN LINKAGES

Emphasizing that the core bottleneck of the pepper value chain currently lies in tenuous links between agribusinesses, cooperatives, and farmers, Lien pointed out that transactions are still largely driven by spot market prices, lacking long-term cooperation mechanisms to share benefits and mitigate risks among stakeholders.

To resolve these difficulties, VPSA proposed strengthening production linkages by reviewing and expanding raw material zones, standardizing crop data, updating models of association, and actively promoting the benefits of collective economic models. Agribusinesses must draft transparent contract-farming agreements, committing to prices, off-take guarantees, and standardized production protocols to build trust among participating growers.

“The pepper sector must concentrate on building a national brand anchored by three pillars: quality, the product story, and customer experience. In this effort, strictly complying with maximum residue limits (MRLs), expanding organic certifications, developing traceability systems, storytelling on digital platforms, and promoting agritourism will contribute to elevating the global standing of Vietnamese pepper.” — Hoang Thi Lien, President of the Vietnam Pepper and Spice Association (VPSA)

In tandem, quality enhancement must be pursued through strict oversight of agricultural inputs, curbing cross-contamination in intercropping models, managing drone spraying operations, and scaling up sustainable farming training programs for growers.

Over the long haul, the pepper industry needs to focus on forging a national brand anchored by three pillars: quality, product narrative, and customer experience. Strict adherence to maximum residue regulations, expanding organic certification, developing robust traceability systems, digital brand storytelling, and promoting agritourism will all help elevate the international image of Vietnamese pepper.

Additionally, the industry must ramp up investments in deep processing, expand Original Equipment Manufacturing (OEM)—processing according to partners' pre-existing designs and formulations—and develop Original Design Manufacturing (ODM) capacity to produce diverse value-added lines such as seasoning blends, extracts, and convenience products. This is viewed as a vital pathway to capture higher value across the entire supply chain rather than relying on raw material shipments as is currently the case.

Against the backdrop of escalating climate change impacts on agricultural production, VPSA also recommended transitioning from monoculture to agroforestry systems to enhance resilience, improve the sustainability of raw material belts, and guarantee long-term development for Vietnam’s pepper sector.

Source: VnEconomy