A 90 per cent drop in vanilla prices over the past six months has made the spice lose its flavour in the global markets.
From around 2023-end, vanilla prices have dropped from $600/kg to $60, especially when prices of other commodities witnessed a rising trend. Industry sources in the domestic market say vanilla is available at as low as $20 per kg, especially from African countries such as Uganda and Tanzania.
Vanilla, a flavouring ingredient, is predominantly an export crop and its domestic consumption is minimal. The industry mainly uses synthetic vanilla. Madagascar accounts for 80 per cent of the global production.
Needs skilled workers
Joseph Sebastian, a vanilla farmer in Idukki and owner of EcoSpice, a spice processing firm, attributed the reasons for the price drop to increased production globally that led to abundant availability across the markets. Earlier, Madagascar was a major production centre followed by Indonesia and India, which produces a minimal quantity.
However, there is no official data on production as it is mainly confined to Kerala’s Idukki region and Karnataka in the South. Indian production has been limited to about 20 tonnes. This is mainly because of the uncertainty in prices and fungal diseases Moreover, it is a labour-intensive crop which requires skilled work especially for pollination of the plants, he said.
Many farmers took up vanilla farming in various countries when its prices peaked. This resulted in ample supply in the market, leading to increased inventories in producting countries. The price fluctuation is cyclical, which is seen once in 10-12 years.
DM Barman, Deputy Director, Spices Board, Regional Office, Guwahati, said a few farmers from Meghalaya and Assam had started vanilla cultivation and they are selling the beans to traders in Karnataka. This year, they sold dry vanilla beans at ₹10,000 to ₹12,000 per kg and approximately 1,000 kg dry vanilla beans were sold out from north-eastern States. As farmers of the North-East have traditional multi-storied horticulture gardens, they can easily grow vanilla without sacrificing additional land.
However, farmers need more market support to expand the area under vanilla cultivation. The price fluctuation affects farmers’ motivation. The North-East can be a hub for vanilla cultivation in the near future if the State governments comes forward with an attractive scheme for development of the spice, he said.