Price of spice: Vanilla surge fuels wild times
SAVA REGION, Madagascar — Hit by rampant speculation and a collapse in production following cyclone Enawo, the price of vanilla — Madagascar’s largest export — has surged in recent months.
Ice cream, aromatherapy, perfume and haute cuisine: all use the spice sourced from the Indian Ocean island which accounts for about 80 percent of global production.
The sudden cash bonanza has threatened to fuel crime and slash quality.
On the single paved road in Ampanefena, a rural community in the northeast of Madagascar, youths pass the time doing wheelies on their highpowered motorbikes.
“It cost 200 million Malagasy ariary ($14,000),” said Akman Mat-hon, 17, atop a Kawasaki. His father is “in vanilla” and bought the bike as a gift.
Business is booming: since 2015 the price of the spice has soared relentlessly to “a neverbefore seen peak of between $600 and $750 a kilo”, according to Georges Geeraerts, president of Madagascar’s Group of Vanilla Exporters.
Since the market was liberalized in 1989, the price has fluctuated — from $400 a kilo in 2003 to $30 in 2005, where it stayed for roughly a decade.
But demand eventually outstripped the supply of around 1,800 tons a year, spurred on by resurgent calls for organic products, speculation by financiers — and by tropical cyclone Enawo, which ravaged part of the production zone.
Madagascar’s bourbon vanilla is a product of expertise handed down from generation to generation and has been considered the best in the world.
But concerns over quality could deter buyers, handing a victory to the country’s main vanilla exporting rivals — Indonesia and Uganda.
“Everything must come to an end and it’s almost certain that there will be a price fall,” said Geeraerts.