The
last 20 months have been very tumultuous for the worldwide vanilla industry.
From Cyclone Hudah in Madagascar, to droughts and then floods in Indonesia,
to floods in the Vera Cruz region of Mexico, the vanilla industry has
experienced it all. Nature, however, has not caused all the problems.
The political unrest in Indonesia has been widely documented in the
media while, more recently, Madagascar has been experiencing its own
political turmoil. All of these factors have lead us to the highest
prices in history.
As the world's largest
vanilla bean producer, Madagascar sets the tone for pricing for the
whole vanilla industry. The 2001 crop, now cured and being shipped from
Madagascar, reportedly is in the 750-800 ton size, whereas the average
yearly crop size is approximately 1,000 tons. Although smaller than
normal we expect no supply issues. Most importantly, after a substandard
crop in terms of quality last year, the quality of this year's crop
returns to its historical high level.
So the question remains
why are we still at record high prices? The feeling in Madagascar is
that if we, the vanilla industry, paid the high prices for lower quality
vanilla beans last year, then we will pay even higher prices for higher
quality beans. And, in fact, that is what has happened. However, the
buying has been based more on need than the fact the beans are higher
quality. The demand for vanilla beans, coupled with the short supply
caused by cyclone Hudah, caused the price increase in 2001. This, in
addition to rumors of crop price manipulation by certain companies and
non-traditional bean buyers being involved in the trade, have further
excited the market.
Indonesia is expected
to have a crop in the 350-400 ton range, which is lower than normal.
However, a large
Although 2002
vanilla prices remain high, a decrease is expetect for 2001.
percentage of the
crop was picked very early and turned into low grade EP's, (Early Picks,
or Cuts). This early picking reduced the overall quantity of the crop
and was mainly due to the high prices. The high prices cause early harvesting
of the beans as farmers want their money sooner. Also, with high prices
the chance of thievery increases. It appears there will be limited quantity
of the higher grade Wholes this year. Although there has been no major
problems with the crop this year, the prices remain at an all time high
due to the prices in Madagascar.
Mexico's crop last year
was approximately 40 tons and was completely sold out by November. This
year's crop is expected to be slightly larger and high in quality. It
will be ready for shipment in April or May of 2002. Prices are expected
to remain high due mainly to the high prices in Madagascar.
Tahiti's crop is expected
to remain small again totaling approximately 8-10 tons. The crop will
remain a niche vanilla limited in growth due to availability.
The organic crop this
year is again very limited in size. Apparently most organic farmers in
Madagascar sold their organic
crop as conventional
vanilla due to the high prices being paid. We are continually looking
for and evaluating potential new sources of organic beans.
Two other areas of
the world bear watching as potential sources in the years to come. They
are Uganda and India. These countries are gradually increasing their
production to levels where they can become factors on the world market.
Both countries are producing Bourbon-type vanilla beans which preliminary
tests show are very close to Madagascar in flavor profile. In addition,
India is a potential viable source for organic beans.
So, what does this
all mean? We are unfortunately in for another year of record high prices
for all varieties of beans. However, there appears to be a light at
the end of the tunnel. The 2002 crop in Madagascar is expected to be
approximately 50 percent larger than the 2001 crop. The large increase
in size is due to new vine production for 2002. With increased supply
and decreasing demand due to high prices, we should expect a decrease
in prices next year. What the percentage decrease might be is anyone's
guess at this point. Again, as the prices in Madagascar go so will they
go in the rest of the world market.
Please feel free to
contact us if you have any questions or would like to further discuss
any of the information above.
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Did You Know? When baking pastries, cakes and cookies, blend pure vanilla extract into the softened butter portion of your recipe. The butter encapsulates the vanilla until it is melted in the baking process, providing better vanilla flavor. |
 Sietse W. Jonker |
Sietse
W. Jonker is the financial administrator at the Nielsen-Massey plant in
Leeuwarden, The Netherlands. As financial administrator, Sietse's job
is primarily one of bookkeeping and making sure that documents are properly
entered into the computer. In addition, the job entails preparing and
sending invoices and completing paperwork for transports.
Sietse's job at Nielsen-Massey
is a part time position. The rest of his time is spent
painting.
Sietse has been an active artist for several years, creating paintings
for exhibition as well as commissioned works. Sietse's interest in art
is evident in his love for museums and the study of art history and biographies
of painters. He is also very active in his Christian
The Final Dancestep, oil on panel by Sietse W. Jonker
community
and enjoys playing computer games.
Sietse lives in Leeuwarden,
sharing a house with his brother. Leeuwarden is the capitol of the province
of Friesland, in the north of The Netherlands.
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