MOUNT ROYAL, QUE. — Take note, food and beverage companies that sweeten products with vanilla specifically from Madagascar. The government of that country has set a minimum export price of $250 per kilogram (2.2 lbs) of vanilla, which could have buyers sourcing from other countries more often, according to a report issued in November by Aust & Hachmann, Mount Royal, which sources and distributes vanilla globally.

“The reality is that a handful of major industrial buyers drive the worldwide vanilla market, and we do not believe they will be cowed into buying vanilla almost 50% above the actual market value,” the report said. “Major competing producing origins such as Papua New Guinea, Indonesia and Uganda are all free and open vanilla markets. The current market scenario forces international vanilla buyers to seriously consider alternative sources and options for their vanilla needs.”

The report may be found here.

Vanilla prices have been volatile this century. They rose as high as $600 per kilogram in 2018 but now are plunging downward. Madagascar is the world’s top vanilla producer.

“Although we do not like the idea of price fixing, in our opinion, had a price that reflected the true current market value of vanilla been chosen, such as $175 per kilogram as an example, the market would be far more advanced and active,” the report said.

Aust & Hachmann expects the 2020 Madagascar vanilla crop will end up at about 1,800 tonnes.

“Flowering for the 2021 crop is already well underway, and although many hurdles remain, it is possible Madagascar will have back-to-back bumper vanilla crops in 2020 and 2021,” the report said.

Indonesia is expected to add 250 to 300 tonnes to the global vanilla market in 2020 while the report’s estimate is a minimum of 250 tonnes for Papua New Guinea.