POINTE-CLAIRE, QUE. — Vanilla bean prices may stabilize, but manufacturers of such items as ice cream and cookies should expect to continue paying high prices for natural vanilla flavor, according to a Dec. 4 report from Aust & Hachmann, a vanilla supplier based in Pointe-Claire.
Although Madagascar, the world’s top vanilla producer, still is overcoming the effects of Cyclone Enawo that hit growing regions in March, Aust & Hachmann in its Dec. 4 report stood by its August forecast of 1,300 to 1,600 tonnes for the 2017 Madagascar crop. The crop size would be above the estimated 1,200 tonnes in 2016, but Madagascar crops in the past have surpassed 2,000 tonnes.
Vanilla was trading at about $500 per kilogram before the cyclone hit. Prices now have stabilized and will remain high, a “notch” below levels created by the post-cyclone situation of April and May, according to Aust & Hachmann.
“Industrial demand for extraction grade Madagascar vanilla remains strong enough to support the record high prices that show no signs of abating in the near term,” the Dec. 4 report said. The report may be found here.
Vanillin contents and aroma profiles in the current Madagascar crop should be much improved over 2016.
“Although the quality of the 2017 crop is definitely better than the 2016 crop, one cannot say it is a ‘vintage’ year by any means,” the report said.
Other vanilla growing regions do not come close to Madagascar’s production levels. Indonesia may produce 150 tonnes in 2017, according to the report. Papua New Guinea’s 2018 crop could yield between 200 and 250 tonnes, and Uganda’s 2018 crop should be above 100 tonnes. The Comoros Islands produced between 40 and 50 tonnes of Bourbon vanilla in 2017.
“The government takes a keen interest in the vanilla trade, and there is an aggressive growth campaign with a goal of doubling production by 2020,” the Aust & Hachmann report said of the Comoros Islands. “The potential is there as this region has produced crop sizes of close to 200 tonnes in the past.”
Vanilla was trading for $20 per kilogram early this decade. Poor Madagascar crops the past three years have played a role in creating the current high price situation.“Barring an outright catastrophic occurrence, we do believe that we are at the end of the current cycle,” the report said. “However, how long ‘the end’ will actually last will depend entirely on how much the major industrial buyers are willing to support the current market. We see only one possible course of action: Proceed with extreme caution while minimizing any long-term exposure to the market.”