The Hindu Business Line : Growers find no flavour in cultivating vanilla

Turning bitter
Demand yet to pick up, while production has gone up.
Reversion from synthetic vanillin to the natural vanilla is at a slow pace.

Kochi March 14 The future of natural vanilla continues to be grim as the prices rule low in the world market without any sign of improvement this year also. To add to the situation, production in Madagascar is said to be on the higher side.

"There are no buyers now for cured bean even at Rs 800-1,000 a kg," market sources told Business Line. The sharp fall in international price to a Rs 955 a kg has pushed down the exports of cured vanilla to 0.64 tonnes in December from 3.5 tonnes a year ago.

However, the low prices have pushed up the total exports of vanilla during April - December of the current fiscal to 98 tonnes from 28 tonnes in the corresponding period a year ago. The average unit value up to December 07 dropped to Rs 1,629.25 a kg from Rs 2,127.99.

Low demand

Contrary to expectations, the demand has not picked up yet while the output has gone up, widening the mismatch between demand and supply, they pointed out.

The demand has to emanate from the end-users mainly the food and ice-cream industry in the US and Europe.

But, it is not forthcoming as anticipated as the reversion from synthetic vanillin to the natural product is virtually at a very slow pace, industry sources here said.

Farmers not keen

Given this current situation, some farmers have even decided to remove the plants, while others are just pruning them and leaving it without carrying out pollination. If they pollinate, then they would have to follow it up with activities involving financial expenditure, which the growers cannot afford due to the prevailing low prices, a planter said.

Production

Domestic production is estimated at around 200 tonnes of cured bean.

In the international market, Madagascar, the world's top producer, has been selling cured bean at low prices through better marketing strategies.

According to them, the production in Madagascar this year is said to be higher than that of last year and it is estimated to be over 1,600 tonnes. In that case, the availability this year would also be higher if the carry forward stock is added.

On other hand, the production in other countries is also likely to be on the higher side. Given this scenario, if the demand fails to pick up corresponding to the increase in production, prices are unlikely to improve, they said.

High prices encouraged other countries including Papua New Guinea, Uganda, India, Costa Rica and Colombia to enter the vanilla business. The production increases, combined with a drop in demand from food manufacturers who are using more and more synthetic vanillin, have sent wholesale bean prices down almost 90 per cent from their peak in December 2003.