NEGLECT of the vanilla crop in most growing countries and the closure of most of Chinaâ€™s synthetic vanilla extract companies has caused an upswing in prices.
Sources said global vanilla prices were steadily rising due to low supply of natural and synthetic vanillin amidst increasing demand by manufacturers in industrialised countries.
Vanilla prices crashed five years ago after industrialists switched to the synthetic type. The price of natural vanilla had surged to over $500/kg when cyclone Hudda ravaged Madagascar, the leading producer of the spice.
â€œThe rise is motivating farmers who have been patiently waiting for an upsurge but the price increments may not be sufficient enough to woo growers who abandoned the crop due to low prices. We expect better prices next year,â€ Philip Betts, the managing director of Esco Uganda, one of the oldest vanilla exporting companies, said.
Betts added that stakeholders who took off when the market exploded may return soon.
â€œOur buyers offer us $17/kg of cured beans,â€ he said.
The farmgate price for last seasonâ€™s vanilla was sh4,000/kg for conventional and sh5,000/kg for organic.
According to the Uganda Export Promotions Board, vanilla fetched $6.2m from 422 metric tonnes in 2007. The export tonnage went up by 116% from 195 tonnes in 2006 to 422 tonnes in 2007. The value also increased by 30% from $4.8m in 2006 to $6.2m in 2007.
â€œSeveral synthetic vanillin factories in China closed down in 2007 due to environmental problems. This pushed the prices of synthetic vanillin closer to those of natural vanillin. The buyers started switching back to natural vanilla, which boosted the prices,â€ an exporter said.
Ugandan vanilla contains a high vanillin content of between 2% and 3.2%, which is among the best quality grades, while Madagascan vanilla, currently the most reputed and recognised in the market, has about 1.8% vanillin.
Wholesalers in the foreign market earn between $123 and $138/kg for cured beans, while retailers who attractively and hygienically pack for the end-users fetch $352/kg.
Ndali Estate, a Ugandan company, which specialises in Premium Bourbon style vanilla beans for the gourmet market, sells its extract grade at $120/kg and cured pods at $1,100/kg.The estate is located in western Uganda at the Mountain of the Moon.
Only five processors are still active in the sub-sector, which once had over 20 processors. The number of farmers is not known but it is reportedly increasing in the districts of Bundibugyo, Kiboga and Kasese.
World vanilla prices rising