The Hindu Business Line : Global vanilla production may exceed anticipated demand

IF reports from various vanilla growing countries and overseas markets are any indication, production of this high-value crop is estimated to be far more than the anticipated demand, signalling further drop in prices.

The output during the year has been put at over 2,000 tonnes, while the demand is estimated to be 1,200-1,400 tonnes. Production in Madagascar has been projected at 1,300-1,400 tonnes, including 200 tonnes of inferior beans. Besides, several new entrants would have their plantations yielding this year.

However, Indonesian production is reported to be less this year at 250 tonnes compared to 350 tonnes last year. The long-time players, Mexico and Tahiti, are reported to have a normal crop. The Indian crop is also estimated to be around 150 tonnes of cured beans this year.

Thus, increasing production in countries from Papua New Guinea to Columbia is likely to push down the prices of vanilla beans and extracts, as the demand has not picked up correspondingly, industry sources told Business Line.

Madagascar and Indonesia are two major vanilla producing countries of planifolia, while tahitensis is grown primarily in Tahiti.

Madagascar, Comoros and Reunion Islands off the East coast of Africa in the Indian Ocean are the source of the premium quality beans known as bourbon.

Indian vanilla is also of superior quality with high recovery rate, they said.

An increase in demand would now depend on the reversion of the industry to natural vanillin, which has been at snail's pace so far.

The sources, however, maintained that "there will be a turnaround by next year as the demand has started picking up, albeit slowly."

All the manufacturing units - large, medium, and small - had shifted to using synthetic vanillin when the prices shot up to unprecedented levels of $500 a kg.

Except for some large ice cream manufacturers who continued to use natural vanillin even at the higher price, all consumers moved away, pushing down the demand, the sources said.

Indian production, estimated at over 100 tonnes last season, is expected to increase as some of the new plantations would have yields this year.

Karnataka topped in production with 82 tonnes last year, of which a good portion was organic vanilla beans.

The country exported 38 tonnes valued at Rs 27.59 crore in 2004-05 against 27 tonnes worth Rs 32.72 crore the previous year.

The unit value realised last fiscal was Rs 7,228.38 a kg compared to Rs 14,178.10 in 2003-04. Prices quoted in the world market ranged from $25 to $35 a kg, they said.

Meanwhile, the sources said there has not been any visible shift towards natural vanillin in India despite availability at low prices. Consumption of synthetic vanillin is said to be over 500 tonnes a year.

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 are replaced with natural product, the requirement of vanilla beans would be 2,020 tonnes at the rate of two per cent vanillin content. "This indicates the great potential for vanilla development in India," they said.

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