Poor harvests and high demand behind vanilla price rises
Vanilla pods and extract prices are likely to remain high, at least for the first half of 2017, according to market reports.
In September 2016 vanilla pods and extract have risen in price. Market experts are estimating that global yields for 2017 will be adequate-to-poor, as a result of poor harvests and unsustainable production practices that are affecting both volume and quality of the beans, and an unstable market.
Adding to the problem is increasing demand worldwide for pure vanilla, largely supplied by Madagascar, Indonesia and Mexico plus a handful of other countries. Chefs and consumers, as part of the trend for natural ingredients, are choosing pure vanilla over synthetic alternatives. This increased demand has put pressure on the supply of pods and beans leading to massive hikes in wholesale prices; it takes several years for farmers to increase vanilla production and high prices have also led to market speculation.
There’s still hope that vanilla prices will stabilise or fall for the second half of 2017 and beyond. Madagascar’s output is expected to grow as are supplies from Indonesia and Papua New Guinea – increasing the global supply.