The Hindu Business Line : Vanilla prices likely to move up

Kochi May 18 Natural vanilla prices are likely to move up by $5 a kg by the year-end as Madagascar, world's largest producer, is projected to have at least 1,500 tonnes, including carryover stocks.

Besides, it is also projected that the next year's crop would be less, as the last two crops were good, they said. Current ruling price for ordinary cured beans is $17-18 a kg, while for best quality it is $20 a kg. Global demand is projected at between 1,600 and 1,800 tonnes.

Another significant development that could bring cheers to the vanilla growers is that several synthetic vanillin-manufacturing units in China, a major producer, are understood to have closed down due to environment-related problems and that, in turn, has pushed up its prices in the international market.

The trend could take the prices of synthetic vanillin to the level of natural vanilla and it might pave the way for a shift towards natural vanilla in the near future, creating an upsurge in the demand for the natural product, industry sources told Business Line. The price of synthetic vanillin has almost doubled on short supply and it is expected to be on par with that of natural vanilla. A similar situation could emerge in other synthetic vanillin producing countries, in view of the environmental problems coupled with the consumer shift towards natural products, the sources said.

Natural vanilla experiences strong competition on two levels, they said. Within the vanilla flavour category, there is competition from synthetic vanilla, or vanillin. Vanillin is the major flavour constituent of vanilla, but it is produced through various bio-technological processes, which continue to be developed.

Although natural vanilla contains many more flavour components than just vanillin — several hundreds have been identified — the difference in taste with synthetic vanilla is hard to detect in most applications, especially for the untrained "mouth". There is also a production of ethyl-vanillin, but this has a less agreeable taste and is used principally in cosmetics and animal feed.

New trend

The latest trend, the sources said, might compel several user industries to switch over to natural vanilla provided its prices remained at moderate levels. According to them, there is a need to launch an awareness campaign about the need to switch over to natural vanilla by the user industries as large quantity of synthetic vanillin is in fact dumped here.

Currently, vanilla flavour in India is almost entirely from synthetic substitutes. The reason attributed to this in the past was there is only marginal production of vanilla beans. Add to this, consumers here are not conscious about the superiority of vanilla beans over the synthetics.

The import of vanillin and ethyl vanillin together to India during 2000-01 was 404 tonnes. Even if only 10 per cent of import of these synthetic substitutes is to be replaced with natural product, the requirement of vanilla beans would be 2020 tonnes at the rate of 2 per cent vanillin content. This is almost one half of entire global production of vanilla beans. The Indian production is estimated to be around 200 tonnes as several growers neglected the vines following sharp fall in prices, they said.

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