Vanilla flavour of the day as business booms after cyclone
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% 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 high-powered Japanese motorbikes.
“It cost 200 million Malagasy ariary (R186 900),” Akman Mat-hon, 17, atop a Kawasaki too large for his frame, said.
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 R8 000 and R10 000 a kilo, according to Georges Geeraerts, president of Madagascar’s Group of Vanilla Exporters.
Since the market was liberalised in 1989, the price has fluctuated wildly.
But demand eventually outstripped the supply of about 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.
Markets in the vanilla-producing Sava region were saturated almost overnight with motorbikes, smartphones, solar panels, generators, flatscreen televisions and gaudy home furnishings.
“The banks struggled to keep up with the pace,” a French trader, speaking on condition of anonymity, said.
Vittorio John, a vanilla grower in his 40s, said: “Money no longer has any meaning, people think it’s a free-for-all, it’s becoming anarchy.”
The price explosion has led to increased thefts from vanilla plantations. Some growers sleep in their fields to guard their precious crop and several thieves have been beaten, imprisoned or even killed.
“We pay two policemen to secure the village,” Patrick Razafiarivo, 42, said.
He is an intermediary between the farmers and the exporters who admits to hiding vanilla underneath his mattress. The authorities admit they were caught unprepared for the boom.
“The root of all the problems is insecurity caused by a lack of capacity, staff, and discipline,” the Sava region’s development director, Teddy Seramila, said.
Fear of thefts in the plantations has also forced some growers to pick their pods prematurely, resulting in declining standards.
“People are doing all sorts. They’re vacuum packing vanilla that can go bad,” Lucia Ranja Salvetat, an exporter from Madagascar, said.
“Non-experts can be misled over the quality. Nothing distinguishes a good pod from a bad pod, you can’t tell the difference.”
The vanilla trade remains largely unregulated in Madagascar, and the scant rules are seldom enforced.
Each buyer can freely tour villages and negotiate prices directly with the farmers or call intermediaries to get a quote.
“There should be a law applied to everyone but instead people do as they please,” one of the exporters from Madagascar said.
Just 21% of people in the region have access to drinking water and only six communities out of 86 are electrified.
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. –