World prices for vanilla, a year has tripled

The shortage of quality raw materials on the world vanilla market has led to a new surge in prices. Last year alone, prices on popular spice used for flavoring ice cream, confectionery products and other sweet dishes, has tripled — from $80 to $250 per kilogram of high-quality pods. For four years prices have jumped more than ten times (in 2012 a kilo of vanilla was worth only $20), but in the near future vanilla rally may end, warns Bloomberg.

“There are limits to how much people are willing to pay for natural vanilla, and we are approaching this limit,” — said the Agency head Cook Flavoring, one of the largest companies in the market of spices, Josephine Locked.

The main reason for the sharp growth of prices for vanilla was increasing demand for natural flavors from companies such as Nestle and Whole Foods Market, in conditions of General shortage of quality raw materials and reduction of yields.

The fact that vanilla is difficult to grow (it pollinating insects are found only in Mexico and in other regions the flowers have to pollinate by hand), but because after a sharp drop in prices in 2002, producers in China, Indonesia and Uganda have begun to switch to other crops. The result is the largest producer of vanilla is Madagascar, where the locals were ready to work on the plantations for $1.5 a day. In 2014, the export of vanilla was brought to Madagascar, which accounts for about half of the supply of these spices to the world market, about $280 million, more profit could be matched only by the Nickel.

However, in 2015, the vanilla harvest in Madagascar has collected less than usual, while the product quality plummeted. Trying to make the most, while the price of vanilla growing, local farmers began to harvest before the pods fully ripen. As a result, the market has been inundated with unripe pods, not had time to accumulate in natural vanilla, which is, in fact, gives the spice its flavor and aroma.

“Brand Madagascan vanilla on the international market under threat,” said Bloomberg, Minister of trade of Madagascar Henry Rabesahala. Alarmed authorities have already banned the export of unripe vanilla pods for the last few weeks in Madagascar, according to the head of the Doc, was destroyed several hundred pounds of the confiscated green vanilla.

Simultaneously, the government of Madagascar shall take all the necessary efforts to increase exports of high quality, and it is still very expensive and vanilla. In 2016 with local plantations, harvesting for which will begin in July, it is planned to collect about 2 tons of spices compared to 1.2–1.6 thousand (estimates vary) in the past year.

“We take it very seriously. We’re not kidding. We don’t want to risk next season,” explained Rabesahala.

However, experts believe that in the near future the price of vanilla can collapse as fast as it happened in 2002, when the cost of a kilogram of spices fell from $500 to $15 in just a few months. The cause of the coming of fracture is called the rapid expansion of the area of plantations of vanilla, that sooner or later should lead to a sharp increase in supply.

“For example, in India the last couple of years [vanilla] planting like crazy,” explained Bloomberg the head of the canadian distributor of vanilla Aust & Hachmann David van der Wald.