A Glimpse Of Hope In the Madagascan Vanilla Trade

‍

According to NPR, nearly 80% of the world’s vanilla is grown in Madagascar. MadaLiving reached out to an operator in the vanilla industry to collect the views of a real on-the-field actor on the current situation. We spoke to Dera Nambinina, a young Malagasy vanilla producer. Here is what he said:

“The global vanilla industry is still heavily dependent on Madagascar and its instabilities. Unanimously, the producers agree that the quality of the 2020 harvest is very good. This makes it possible to start a way out of the crisis on the world market".

The 2020-2021 vanilla campaign took place in Madagascar from September 15, 2020 and will close on May 31, 2021. He continues that,

“You could say that the vanilla harvest in Madagascar since 2018 marks the beginning of the end of the global vanilla crisis, which has gripped the market for the past two or three years. Prices have fallen modestly and the quality has improved considerably compared to 2017".

‍

What fueled the growing crisis?

In fact, the growing demand for prematurely harvested vanilla beans is fueling the crisis. Since 2018, hundreds of tons of green vanilla pods have been purchased by major flavor and fragrance manufacturers (very often at ridiculous prices). In addition, the extremely revised downward prices, recorded on the green pod market and on the prepared black vanilla market, served as a reference, the current price in Madagascar is 250 USD FOB per kilo, instead of 350 USD. FOB per kilogram. For the moment, despite the historical level of price drops, other traditional vanilla producing countries have not been able to position themselves as serious competitors of Madagascar (in terms of volume and quality). The outlook is to consider a significant increase in vanillin yields, because the strength of the Madagascan vanilla lies in the strong and very high level of vanillin in Madagascar vanilla, ... an incomparable rate anywhere else.

‍

How has this affected pricing of vanilla?

Concerning the price, many factors have contributed to the reversal of the situation: THE LAW OF SUPPLY AND DEMAND especially, Madagascar has always been a producer country which held the world monopoly of vanilla. Today, we are competing with countries such as: Indonesia, Haiti, Thailand, Mexico, Uganda, New Guinea Papua, Ecuador because these countries sell their product at a lower price, but the quality of Vanilla from Madagascar is incomparable. Finally, the Malagasy local currency is at its lowest level against the US dollar, which helps maintain the stability of vanilla prices internationally because 250 USD is equivalent to almost 950,000 MGA of the local currency, So having lowered the price from 350 USD to 250 USD is not such a bad thing for us Malagasy people.”

Dera Nambinina, owner of Goshen Vanilla Madagascar

‍