The vanilla export campaign started a month and a half ago (September 15), but at the moment buyers are not killing with exporters from the Big Island, the world’s largest producer of this spice.
After years of high prices and peaked at $ 550 per. Kilo in 2018, the vanilla sector has seen a marked decline since last year. To avoid a sudden drop in prices in this volatile market, the Malagasy government has set a minimum export price of $ 250 per kilo. Despite this price halved compared to 2018, orders are currently few.
Promises, but no firm orders. This is the situation for many exporters from Sava, a region in the northeastern country that produces the most vanilla. “Importers are waiting to see if the $ 250 price set by the government will be maintained until the end of the campaign or if it will fall. Some think like that and seek to make money.
They do not directly say that it is too expensive, but they justify in relation to the local price and the quantity available on the market. There are many, but few buyers ”, explains one of them.
This operator exported 700 kilos of vanilla instead of about five tonnes, usually during the same period. “The quality of the vanilla is nevertheless very good this year. Before, they bought it for $ 500, so there for $ 250 per. Kilos with an even better quality than last year, I do not see what the problem is with this price, ”he continues.
“A wait-and-see attitude on the part of importers, causing disruption in the sector,” laments Georges Geeraerts, president of the group of vanilla exporters from Madagascar. For him, this dismal start is also due to the fact that the vanilla export campaign started a month earlier this year. “Buyers were therefore covered as they did not expect an opening on 15 September,” he notes.
Offers below the minimum price
The market is also disturbed by offers lower than the minimum price imposed by the Malagasy government. “Some outside of Madagascar would offer vanilla far below this price of Malagasy origin. Which is hard to understand. So our regular customers tell us they can not understand why we charge a price of $ 250 per. Kilos, while others offer them half price. But these offers are illegal, ”he explains.
While some operators find that the amount of vanilla on the market is too large in relation to demand, this is not the case for Georges Geeraerts.
“I think there is room for much more vanilla than what we sell now, but the term ‘natural vanilla’ has been used too much and many have cheated the label. Containment has also changed consumption habits.
People want to treat themselves, and the vanilla aroma is a ‘feel good’ aroma. So people cooked at home. They bought products like vanilla, vanilla ice cream, etc. For me, there is still no sign that the vanilla market would be less demanding. ”
A sudden drop in the price of vanilla would have significant consequences for the country as the sector is the second largest supplier of foreign currency to the Big Island. While the tourism sector, another major source of foreign exchange for Madagascar, was completely paralyzed this year by the crisis caused by the Covid-19 pandemic, the vanilla sector is even more important.
