The Hindu Business Line : Cured vanilla bean production estimated at 60 tonnes

VANILLA production during the current season (2004-05) is estimated at around 60 tonnes of cured bean (3,000 tonnes of green bean) and the entire quantity is likely to be exported this fiscal.

The Spices Board expects to achieve an export target of 50 tonnes in the current fiscal, Mr S. Kannan, Director (Marketing), told Business Line.

He said an estimated 100 tonnes of green bean had been bought so far by processors from growers in Kerala and Karnataka at an average price of Rs 250 a kg.

Almost 80 per cent of the beans are of A grade quality. The production in 2005-06, according to market estimates, could be 30 to 40 per cent more than that in the current season.

One of the major growers of vanilla, AVT will have around 5.5 to 6 tonnes of cured bean from the 2004-05 crop. Similarly, some other companies will also have a sizeable production.

Real production could not be predicted for want of actual acreage under the crop as many had taken up cultivation of vanilla and remain unorganised. However, all are waiting for demand to originate from the overseas markets, mainly the US.

According to Dr K. Gopinathan, Assistant Vice-President, Agro-Projects and R&D, AVT Natural Products, buyers in the overseas markets are waiting for the release of the Madagascar crop, which is expected some time early next month. The demand will pick up if the prices remain at moderate levels as the companies that had shifted to synthetic vanillin when the vanilla prices shot up to over $400 a kg will have to revert to natural vanillin, he said.

The demand has dropped from around 2,500 tonnes last year to about 1,000 tonnes because of the high price. In fact, except a few companies, such as Hogen and Daus in the US, major manufacturers of ice cream who could absorb the loss were buying at higher prices, while many others switched over to synthetic substitutes, industry sources said.

"Provided we confirm supplies and quality at an attractive price range, there is no reason why manufacturers will not use natural vanilla which has a magic and an aura of its own. Where industries could not replace natural vanilla - dairy products, premium foods and fragrances, some types of beverages and I assume even pharmaceuticals - there was no choice but to continue using high-priced vanilla, make adjustments in the selling price... not always easy, and bide time until prices dropped to ground level," said Mr Bewoor, Managing Director, International Flavours and Fragrances India Ltd, Chennai.

He said producers of vanilla who made money had to now revert to "standard" or even below-standard margins to protect volumes, market share and customer loyalty. There were more sellers than buyers and the market sensed it, he added.

According to market sources, the price at the international level is expected to stabilise at $60 to $70 a kg for cured beans, and, in that case, growers could get a price of around Rs 500 for a kg of green bean.

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