Vanilla Prices - Going Down ...

[Guest guest]

I recently spoke to a contact of mine who is a manufacturer of vanilla

products for the food industry and he confirms that this year has been a

good year for the vanilla bean crop and we should begin seeing a price

reduction reflecting that

 

Below is a related article ...

 

*Smile*

Chris (list mom)

http://www.alittleolfactory.com

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~

 

http://www.afrol.com/articles/13754

 

Vanilla crack threatens Madagascar, Comoros

 

 

 

 

 

 

 

 

afrol News <http://www.afrol.com/> , 19 August - After years of record

world market prices for vanilla, the tropical crop is facing a crack. In

Madagascar and Comoros, vanilla is a major foreign currency earner. The

record harvests here are set to be sold at less than one tenth of the

prices achieved only recently, spreading fears of a long-term disaster

for the industry.

 

In the impoverished Indian Ocean state of Comoros, agriculture still

contributes with 40 percent of GDP. Vanilla is the main cash crop and it

is the main export commodity of the archipelago, where years of

political turmoil have hindered investments in other sectors. Almost 70

percent of Comoros' total agricultural exports and 33 percent of all

exports is vanilla, according to FAO statistics.

 

Neighbouring Madagascar is the world's leading vanilla producer, but the

Great Island is comparatively less dependent on this crop, which

represents 10-15 percent of total exports. Entire Malagasy landscapes,

in particular in the north-east, however totally depend on the vanilla

crop and its spin-off industries for their economic development.

 

During the last decade, vanilla prices have soared from about US$ 20 a

kilo to record prices of up to US$ 300 during last year's vanilla

scarcity. A devastating cyclone in 2000 and the 2002 political crisis in

Madagascar heavily influenced this boom in vanilla prices.

 

However, those Malagasy and Comorans that were able to produce during

the political and natural crises of their countries made record revenues

during the last few years. The Antalaha region in north-east Madagascar

- often referred to as the " world centre of vanilla production " - wealth

accumulation among plantation owners and small-scale farmers has been

tremendous. New built houses and four-wheelers are seen everywhere.

 

This year, north-eastern Madagascar has been spared political turmoil

and the annual cyclones passing the island only affected a limited part

of vanilla growers, which have been spurred to increase acreage due to

high prices. Record harvests are thus being reported from Madagascar,

while the comparatively small harvest in Comoros also is good. Also

continental growers, mainly in Uganda and Mozambique, and Asian

competitors cannot complain.

 

So far. As it in July became clearer that the forthcoming Malagasy

vanilla harvest could beat all records, the London commodity exchange

reacted with rapidly shrinking prices. Vanilla buyers at the end of last

month forecasted that the Malagasy harvest alone would become more than

twice as big as the annual world market demand of 1,000 tonnes.

 

Since mid-July, vanilla prices thus have been in the air, falling

rapidly towards zero. Ugandan and Asian producers, who were able to

market some of their vanilla during July, still achieved

near-sustainable prices. As the Malagasy and Comoran vanilla now hits

the market, however, producers will find it hard to pay their bills.

 

No one in Madagascar and Comoros expected last year's record prices to

last forever. It was widely known that the country's own crisis -

Madagascar produces 50 percent of the world's vanilla - had strongly

affected the world market price. As harvests proved to become good,

producers expected a drop to the still good price level of the 2000-02

seasons.

 

At the world's leading commodity exchanges, however, prices are

crumbling to such a degree that ten years of positive developments in

the industry are jeopardised. Reports from London indicate a 98 percent

fall in prices compared to last year. Malagasy and Comoran smallholders

and plantation workers are fearing the worst.

 

In north-western Uganda, where vanilla was introduced as " the green

gold " only a few years ago, farmers broke out in riots as they were paid

only fragments of what they had expected. As Malagasy and Comoran

farmers now are to market their vanilla beans, prices will be even

lower.

 

 

 

By staff writers

 

C afrol News