The Hindu Business Line : Vanilla growers hit by falling prices

Kochi, Feb. 19 Low prices for natural vanilla have put growers in dire straits. The growers are looking to the Government to bail them out of the crisis by initiating steps to increase use of the product in the country. The prices of A-grade vanilla bean have dropped sharply to much below the remunerative levels, at Rs 60-65 a kg, while B and C grades are sold at Rs 50 and Rs 25 a kg respectively. To be remunerative the prices should remain at around Rs 200 a kg, Mr C.V. Jacob, Managing Director, Synthite Industrial Chemicals, a major grower as well as processor of vanilla, told Business Line on Tuesday.

In the international market, he said, the demand is only for A-grade beans, length of which should be at 8 inches. The price offered, at present, by the overseas buyers is just $20 - $21 a kg against $450/kg about four years ago, he said.

The top producer of natural vanilla in the world, Madagascar, he said, can afford to offer at low prices as the cost of production there is much less than that of here. According to Mr Jacob, areas suitable for sustainable vanilla cultivation here is at elevations above 2,000 feet. In other areas, it would require irrigation.

He said his company had bought 500 tonnes of green beans during the just ended harvesting and processing season from growers in Mysore in Karnataka and Kozhikode and Ernakulam districts of Kerala. A-grade beans were processed and exported, while the balance quantity was used for extraction.

The total Indian production, during 2007-08 season, according to him is estimated at 1,500 tonne of green beans.

The top category beans classified as “gourmet” grade are above 15 cm in length; they are selected from A grade beans having over 1.75 per cent vanillin and 25-30 per cent moisture content and are brown in colour. Normally, 20-25 per cent of the total production from the scientifically cultivated farm may be of this grade, he said.

Seek Govt aid

Given this disturbing situation an effective government strategy, which has been missing so far, is the need of the hour to help the vanilla growers in the country, he said. The Government may have to come out with some legislation, making use of natural vanilla mandatory in some of the ice-creams and other food products, he said.

Even though ‘Amul’ has come forward to use it in its products, it has not so far made much impact on the prices. Since it is a co-operative institution it has been procuring natural vanilla only from the cooperatives and hence the private companies remain left out.

Consumption

Natural vanilla consumption in the country at present is only around five per cent of the total consumption, he said. Total vanillin consumption is estimated at around 400-500 tonnes a year. “This trend should change and the related industry such as of ice cream, confectionary and other food manufacturing sectors should absorb more natural vanilla,” he said. As the international price has dropped significantly, the Indian exports of natural vanilla has shown a substantial increase. Shipments during April-December 2007 stood at 140 tonnes valued at Rs 11.65 crore against the target set for the current fiscal by the Spices Board of 150 tonnes valued at Rs 26.25 crore.