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C.R. Sukumar

Supply uncertainties from Madagascar and reasonably high quality of Indian vanilla have driven developed countries to look at India as an alternative supply base, the Exim Bank study said.

Hyderabad , Jan. 29

AN Export-Import Bank's (Exim Bank) study on vanilla's potential has observed that with certain policy interventions by the Union Government and with more private and public partnership, the country can emerge as a significant player in the global forum.

Aimed at creating sizeable demand for vanilla within the country, the Exim Bank study has recommended appropriate policy intervention by the Centre and enactment of laws for mandatory use of natural vanilla concentrates in the high price ice-cream segment and introducing labelling requirements to distinguish ice-creams using natural vanilla from synthetic ones.

"With highest price realisations amongst spices and comparatively low cost of cultivation, vanilla stands out as a highly profitable cash crop for Indian farmers when grown as an intercrop," the Exim Bank study pointed out. Further, the bank has also observed that being a labour-intensive crop, vanilla is ideal for small and marginal farmers.

According to the bank, uncertainty of supply from Madagascar and reasonably high quality of Indian vanilla have driven importers in the developed countries to look at India as an alternative supply base of vanilla. Besides, India also has the potential to emerge as a key player in the organic or gourmet variety of vanilla, the study said.

Grown mostly in Karnataka and Kerala and to some extent in Tamil Nadu, the North-East region, Lakshadweep and the Andaman and Nicobar islands, the area under the crop is approximately 3,544 hectares.

According to the Exim Bank study, almost 90 per cent of the world vanilla production comes from the Indian Ocean Island Nations - Madagascar and Indonesia. Being the leading exporters, Madagascar has a 70 per cent market share followed by Indonesia, Comoros and Reunion Island. With its modest annual supply of about 100 million tonnes, India is currently the sixth largest exporter.

The US is the major importer accounting for almost two-third of the world imports followed by the Netherlands, France, the UK and Germany, the study said.

The prices of cured beans of vanilla are conventionally administered by Madagascar. However, owing to uncertainty of supply due to political instability and frequent natural calamities in Madagascar, prices of vanilla fluctuate substantially.

At present, the price of vanilla is hovering between $30 and $40 a kg. The Exim Bank study has pointed out that wide price fluctuation has driven the user industries of natural vanilla to synthetic vanilla produced from wood, lignin and other sources because of its low price, which is almost one-tenth, and also because of easy availability.

The Exim Bank study has also reviewed several initiatives taken up by institutions such as Spices Board, Central Food Technology Research Institute (CFTRI) and Indian Institute of Technology (IIT), Mumbai, for development of the industry, particularly for accelerated curing technology and super critical fluid extraction.

Even if a mere 10 per cent of the present synthetic vanillin consumption could be converted to natural vanillin through measures of mandatory use of natural vanilla concentrates in the high price ice-cream industry, the Exim Bank study observed that the domestic demand of about 750 million tonnes of cured beans could be created, which is almost eight times the country's present production.

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