POINTE-CLAIRE, QUE. — The vanilla crisis in Madagascar, the world’s top producer, is getting worse, according to a Feb. 21 report from Aust & Hachmann, a vanilla supplier based in Pointe-Claire. Export prices for vanilla from Madagascar have breached the level of $500 per kilogram after a disappointing 2016 crop, according to the report, and prices almost certainly will eclipse the high prices of 2003.
Six years ago the vanilla market was more of a bear, as prices for vanilla beans were about $20 per kilogram.
At the beginning of 2016 vanilla prices from Madagascar were in the range of $200 to $250 per kilogram. A projected 2016 crop of 1,800 to 2,200 tonnes of vanilla beans in Madagascar was expected to bring down prices. Now, Aust & Hachmann expects the 2016 crop probably was no larger than 1,200 tonnes.
While a decent vanilla crop in Madagascar may reach 2,000 tonnes, no other country comes close to a crop of 1,000 tonnes. Indonesia probably contributed more than 500 tonnes to worldwide trade in 2016, but the majority of that was from previous crops, and now inventories in Indonesia are down, according to Aust & Hachmann. Production in Uganda is below 100 tonnes. Papua New Guinea may provide some relief as production there should be significant in 2017.
“It is very difficult to predict when the current vanilla crisis will end,” the report said.
The complete report from Aust & Hachmann, which offers vanilla as a raw material and as a finished product, may be found here.
The report added green vanilla bean extraction and quick-cured product in Madagascar are hurting vanilla quality in Madagascar. About 300 to 400 tonnes of vanilla beans were removed from the 2016 crop as a result of green vanilla extraction.
Through quick-curing, harvested green vanilla beans are cured and available for export in weeks instead of months.
Quick-curing degrades vanilla quality, however, according to the report. If the market continues to move to more quick-cured product, it will become increasingly difficult to find traditional gourmet (black) vanilla, red splits, European grades or classical cuts.“In effect, quick-curing commoditizes vanilla into one grade,” the report said.