The Hindu Business Line : Rains add to woes of vanilla growers

THE incessant rains this year have adversely affected vanilla vines in some plantations in Kerala resulting in susarium disease, which is likely to reduce production during the current season.

Harvesting has already commenced in the plains, while it is due next month in the high ranges. The rains have led to decaying of vines in some plantations, a senior official of a corporate plantation told Business Line. The extent of damage would be known when harvesting commences full swing, he said.

He said there would be no impact on the total projected production, as the total acreage was still unknown. Arrivals from unknown quarters were likely, he said, adding that the projection for the current season from the organised sector was 125 tonnes of cured beans.

However, prices continued to rule low. In some areas in Kerala and Karnataka the green bean is sold at Rs 110 - 130 a kg, far below remunerative levels. According to the official, remunerative prices for corporate plantations are Rs 350 - 400 a kg, as the cost of production includes high wages, bonus etc.

There has been no demand from the international market even at $15 a kg, he said. The changeover to natural vanillin by consumers in the US and elsewhere was proceeding at snail's pace. The international market trend would be clear once the Madagascar crop entered the market in January 2006, he said.

As market intervention, the Spices Trading Corporation Ltd (STCL) has reportedly offered to buy 3,000 kg of cured beans at Rs 1,500 a kg. STCL sources told Business Line that the corporation had sent samples to the Spices Board for quality checks.

According to earlier reports, the international demand for natural vanilla this year is projected less than 1,000 tonnes as against 2,500 tonnes in 1999, as major US buyers are yet to enter the market.

Industry sources said major international buyers must first deplete existing stock before entering the market. "In fact nobody is sending a firm reply to the offers made by the producers and hence it is not going to be encouraging this year," they said.

According to analysts, global demand fell in 2004 to 1,100 tonnes from the 1995-2000 average of 2,000 tonnes. "Although analysts expect that the market will partly recover when prices come back to normal, this will not be easy, since both flavour producers and food manufacturers have changed their recipes — and probably their strategies," says a market study.

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