According to Bloomberg, the price of vanilla beans has tripled in the past year after Madagascar suffered from a poor harvest. In recent years, after a decade of low vanilla prices, production declined in places like China, Indonesia, and Uganda as farmers switched to other crops and inventories shrank. As prices started to improve, growers in Madagascar started harvesting more pods sooner than normal and packaging them in vacuum-sealed containers rather than curing and drying them. The packaging gave wholesalers the flexibility to wait for higher prices as global supply shrank. But because the beans were so immature, they hadn’t fully developed the compound vanillin, which is responsible for all the flavor and aroma.
With a smaller Madagascar crop last year and fewer good-quality beans, prices surged in the United States, the world’s No. 1 buyer. Currently, higher-end vanilla can cost $250 a kilogram, compared with $80 a year earlier and $20 as recently as 2012. Even lower-grade beans sell for $210, up from $60 a year earlier.
To discourage lower-grade beans, Madagascar has recently agreed to block exports of immature green vanilla, imposed a ban on vacuum-packed pods, and increased the power of local security organizations to act against transgressors.
However, the high prices may not last since Madagascar is predicted to harvest a bigger crop this year than last. In fact, this year’s harvest, which begins in July, probably will rise to about 2,000 tons from about 1,200–1,600 tons in 2015.
