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We anticipated
that Vanilla prices would decrease by the end of 2016, instead,
they took a sharp increase.
There is no significant stock available in Madagascar and Indonesian
inventories that helped
relieve the market gap are beginning to thin.
Price per kilo is expected to continue rising until the new
Madagascar crop can bring some relief in early summer this year. A
few things need to happen for alleviation, most notably, producers
must implement restrictions on early picking. Green Vanilla prices
in Indonesia are over $30/kg, 10 times more expensive than three
years ago, but not nearly as much as the Madagascan price of $80/kg.
The pressure is on the farmer to keep green beans on the vine as
long as possible.
Quality is fluctuating and we are seeing vanillin rich lots mixed
with old moldy lots that have been poorly stored or improperly
cured. Therefore, all beans received at TRIPPER undergo a very long
grading process. We hope to see stability by the end of the summer
but we also must consider the long-term sustainability of the
market.
In the past, it made sense for Madagascar to dictate the market value
of Vanilla. Even with premium pricing, the quality of Madagascan
beans justified the cost. However, with the proliferation of vacuum
packaging and the increase of early picking and quick curing, the
`Madagascar standard` has lost its bearing.
Indonesia, on the other hand, has much to offer the Vanilla market.
The expansive archipelago is rich in biodiversity and has more
extensive banking and infrastructure compared to Madagascar. If
consumers are looking to stop Madagascan price manipulation and
soaring prices, supporting the Indonesian market is key.
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