The latest scoop; Vanilla price set to soar
September 25, 2021
The price of vanilla is set to soar to record highs, created by a combination of climate change and crime. Additionally, the vanilla market is set to experience particularly low yields, as well as a dramatic decline in the quality of the vanilla bean.
The worst storm in 13 years hit Madagascar in March 2017, the main producer of vanilla, accounting for more than 80% of the worlds’ supply. The storm damaged 30% of Madagascar’s crop, which was already affected by drought, as well as killing 78 people, displacing around 5,300 people and affecting nearly half a million people.
Shortages are also expected as demand on the vanilla bean continues to increase, and the crop availability suffers, and output declines.
The most recent demand for pure, natural vanilla has grown from manufacturers such as Nestle SA and Hershey Co. as they continue to shift away from artificial flavours.
This increase in demand has affected the famers as they struggle to meet the increasing consumption, due to duration of growing vanilla beans to maturity taking between three to four year from plantation. Farmers will be feeling the pressure to produce quickly as speculative vanilla that was stored globally, has largely been sold.
The combination of the increased demand, and falling availability of crop has resulted in the price of vanilla to soar, with prices doubling in the last year and quadrupling in the last four years. To replace the damaged crop, it could take up to five years for a new plantation to produce its first market-ready crop.
Thief’s in Madagascar have been taking advantage of the soaring prices of vanilla and are stealing the beans from the fields that are already struggling to keep up with demand. As a result farmers are under increasing pressure to pick the vanilla pods as quickly as possible, before the beans reach maturity, and while they are still green and lacking in flavour. These green vanilla pods dry faster and therefore produce a lower-quality vanilla.
This lower quality vanilla will also affect the farmer, as they are paid based on the quality. The combination of climate change and theft will undoubtedly reduce the farmers financial security, leaving them with less to invest into increasing the quantity and quality of the vanilla, including aiding them to secure themselves against ongoing theft. Without change in this situation, we can be expected to pay higher prices for vanilla in the future.