Western and Central Africa
Eastern and Southern Africa
Eastern Europe and Central Asia
Monday, 19 Sep. 2016
As the green vanilla bean buying season closes in Madagascar confusion grows: where will prices open once the first cured beans come to market in October, and how long can the high prices be sustained?
To cap it all, A&H expect a poor curing ratio of 6 or 7kg of green beans to 1kg of cured, on the basis that too much of the crop has been harvested immature as farmers sought to minimize theft and maximise the returns from a market that has looked precarious throughout. The fear that high prices might be short lived is surely justified. There are scant fundamental arguments why the market should be at these stratospheric price levels. There is no obvious shortage of vanilla in the market, and the higher the price the more likely that consumers will turn away from Madagascar as an origin or natural vanilla as a flavour. French trade house Eurovanille pointed out that “…..the price of green vanilla has exploded and by the end of July, has doubled. A lot of players on the global market had not been adequately prepared for the surge in this year’s prices and had therefore pushed their local suppliers in Madagascar for higher volumes.These demands obviously put pressure on an already tight market driving up prices further. This led to more price speculation by local intermediaries such as processors, collectors and to a lesser extent, exporters. This was in spite of actual output being higher than last year.” (http://www.eurovanille.com/en/our-mission/vanilla-market-report.html) Meanwhile the speculative rumours infest the scene.
We do not make forecasts here other than to predict that for anyone with a position in this wild market it will be the scariest ride through the end of 2016 and into 2017.