How The Price Of Vanilla Is Set
La vanille, a spice highly appreciated by consumers, is the fruit of a very long process that requires a lot of patience to guarantee a quality product. Only three species of vanilla are marketed in the world and the conditions must be met to produce them: the land, the climate and the working methods influence its taste and quality. This obviously makes vanilla very complex. Vanilla production is, in addition, one of the few productions where most of the earnings go to the farmer-producers and this allows them to make a decent living. Madagascar holds nearly 80% of the world’s vanilla production. As a result, vanilla is highly prized and appreciated, and requires the preparation process to be followed to perfection in order to offer quality vanilla to the global vanilla market.
A combination of climate change, crime, and market speculation has pushed the price of vanilla to record levels, simultaneously damaging the quality of the natural beans. Before the harvest season in the southern hemisphere and summer in the northern hemisphere, the near default ice cream flavor choice may not be as ubiquitous as usual.
Vanilla production costs
The price of vanilla beans varies and is set by a large number of factors that include:
The main important factor is simply the fact that the Ministry of Commerce sets the price. Indeed, an order is drafted at the beginning of each green vanilla season to set the price of green vanilla as well as the export price. This decree defines the reference price, i.e. the minimum “authorized” price for vanilla sales. This regulatory price also allows for the annual renewal of the export license.
There is a high rate of theft of bourbon vanilla pods, the vanilla fields are worth gold and a real struggle is undertaken by producers and exporters to curb this problem.
With 80% of the production of bourbon vanilla, the red island is by far the largest producer in the world. And the vanilla fields are worth their weight in gold: a kilo of pods sells for between 350 and 400 €. A fortune in a country where the average salary is 175 € (source: numbeo). Unsurprisingly, theft is commonplace. But the alarm bells are ringing when criminals start to attack green vanilla beans. A real struggle is underway on the part of producers and exporters to curb this problem that is putting the industry in jeopardy.
Bourbon vanilla growers have set up a surveillance system at all times. Night and day, with a gun in hand, they secure their fields. It is in this context that several vanilla thieves have been killed by planters ready to do anything to defend their precious land. But the security of the plantations remains paltry.
And the thefts profoundly impact the quality of the vanilla. In 2017, exporters unwisely purchased vanilla that had been picked before maturity or stolen. To counter this scourge, producers decided to harvest the vanilla a few weeks before the announced date, but the result is dramatic: odorless or lower quality vanilla.
All means are good to protect yourself
The spice always attracts envy. To protect themselves from vanilla bean theft, some farmers in Madagascar write their names or serial numbers on their beans. This information makes it possible to identify them even when they are dry, as the marks remain visible.
The Ministry of Agriculture has also implemented a system of pod stamping. This method consists of identifying the vanilla pods of producers in order to trace the origin of the product. Since the beginning of the year 2020, out of nearly 800 kilos stolen and seized by the Malagasy gendarmerie, 630 vanilla beans have been returned to their owners thanks to this technique.
At the same time, farmers are trying to plant more vanilla so that their production is profitable despite the thefts. Some of them have also built huts to sleep in their fields and thus have better visibility, on the lookout for thieves.
Without pods, they have nothing
For some producers, vanilla production is the only source of income. If they are robbed, they are left with nothing despite years of hard work. A situation of precariousness that leads to scenes of extreme violence. For example, some planters dig holes and cover them with leaves in order to trap vanilla thieves, others install mechanisms that allow them to fire their guns at the approach of the criminals.
The theft of vanilla pods is dramatic for the sector. The financial loss of producers amounts to several million euros. In the future, solutions must be found to stop this plague.
The pollination is ensured by the man who proceeds to the fertilization of the flower of the vanilla, there is indeed no insect pollinator in the producing countries, it is only in Mexico.
The man pollinates by hand each vanilla flower to produce vanilla pods. Each vanilla flower opens only one morning, so they must be checked every day to pollinate the flowers one by one. This is the work of the “marieuses”. 50 to 70% of the pollinated flowers will give a pod, which can be harvested nine months later. The survival of vanilla pods is largely due to the valiant efforts of the Melipona bee. This is the only bee known to be able to pollinate the vanilla orchid. Vanilla orchid flowers are hermaphroditic, meaning they contain both female and male parts.
Due to a specific tissue in the flower that completely covers the stem (called the rostellum), the flower is unable to self-pollinate. Another factor to consider is that the pollen of a vanilla orchid is incredibly difficult to access. As such, another bee could not reach the pollen. This is why the Melipona bee is so valuable in its natural habitat.
Mannual pollination
Finally, the flower blooms only one day a year and is also only open for a few hours. The hand pollination process is extremely intensive, and since the Melipona bee is only found in Mexico, for all other countries that grow vanilla, a hand pollination process is necessary. Typically, hand pollination of vanilla plants will take place between the months of October and January. The idea of manual pollination originated in Reunion Island. On a remote island in the Indian Ocean in the mid-1800s, a young slave man named Edmond Albius created the technique.
In doing so, he solved a botanical mystery and came up with a method that is still used today. Because vanilla orchids are now grown in many places around the world (primarily in warm subtropical and tropical climates), it became necessary to introduce a process of hand pollination.
Extreme climatic hazards are common in producing countries.
In Madagascar, cyclones are frequent. Cyclone Enawo weakened vanilla production in 2017, affecting about 30% of Madagascar’s vanilla crop. Some producers harvest their vanilla beans before maturity to ensure a profit.
Tahitian vanilla is also impacted by climate change
Vanilla is often imported as it is grown far from our regions. Therefore, there is a cost involved in importing the product.
All the steps of preparation of vanilla are carried out by Man, crucial steps to elaborate a quality product: scalding, fermentation, drying, grading, preparation of shipments. These steps require a lot of time and a lot of manpower. All this process has a cost to achieve a substance sought by gourmets: vanillin. Vanilla is difficult to grow.
The demand is more important than the offer which strongly influences the market price. Indeed, we observe, today, a more and more sustained demand approaching 2500 tons. An ever-increasing demand and a reduced supply, which also explains the soaring prices of this spice so coveted.
All these factors partly justify the increase or decrease in the price of vanilla, a spice so prized. The global vanilla market has seen price fluctuations over 20 years. In 2018, the price of vanilla was €490 per kilo ($600 per kilo). For the 2020 crop, the price per kilo of vanilla is around 350€, a fairly low price compared to previous years. With the Covid pandemic, the world markets have experienced quite significant price drops. However, the vanilla market has been able to fight back!
Discover our selections of bourbon vanilla beans from Madagascar at an unbeatable price! Moreover, by managing the entire supply chain of our vanilla, we pay the farmers-producers a fair price.
