The Hindu Business Line : Low prices force vanilla growers to neglect plants

Kochi, Dec. 4 Growers having lost confidence in cultivating vanilla following continuous fall in its prices, which have now touching abysmal levels. They have resorted to neglecting or rather abandoning plants which appear to be no longer economically viable.

“Investing in vanilla is now totally ruled out and whatever yield is there in the plants that is being harvested,” said Mr T. V. Gopinath, a planter in Madikeri, on Tuesday. The price of green bean has been falling during the past three years to unremunerative levels.

“Last year I sold A-grade green bean at Rs 60 a kg and this year it has declined further to Rs 40-50 a kg. At this level of return we cannot afford to spend on maintaining the plants,” he told Business Line. In this situation, new planting was totally ruled out, he said.

In the current situation, some of the farmers have gone to the extent of removing the plants, while others have left 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,” he said.

Meanwhile, dealers were holding stocks for the past two years and were not ready to expand their inventory further as there were no overseas buyers at present, he said.

Add to this there is shortage of labour. “The available labour is deployed now in the coffee plantation, which is giving us good return,” he said. The production of green bean this season, harvesting of which is yet to pick up in Karnataka, is estimated at 600 tonnes, he added.

However, Mr C.V. Jacob, Managing Director, Synthite Industrial Chemicals at nearby Kolencherry, which is a top exporter of oleoresins, spice oils and vanilla from the country said: “If we were able to sell the cured bean at $27 a kg there will be a profit of $3”. But, the international price, at present, is showing a declining trend”.

The output in Kerala was also estimated at around 700 tonnes of green bean and the price offered here is Rs 50 for A-grade bean, he said.

Last year the company, a major processor exporter of vanilla, had processed 450 tonnes of green bean and got 70 tonnes of cured bean. Of this, it processed 10 tonnes for extracting vanilla extracts for its 18 customers spread over in Europe and the US, he said. Despite having few committed buyers for cured beans it could not export the entire quantity and as a result it is holding a stock of 10 tonnes, Mr Jacob said.

He said the total output of cured beans in the country would come to around 175 -200 tonnes this season, he added. According to a recent overseas report, vanilla prices in the world’s top producer of the crop, Madagascar, had dropped to $25 to $30 a kg. The price of the commodity which shot up to $450-500 a kg in 2003 following severe short supply had plummeted to the current levels because of the mismatch in demand and supply, it said.

The high prices in 2003 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.