"in 2014 the price of vanilla began to rise. Over the next three years it went from less than $40 per kilogram to more than $600 per kilogram."
"It can be difficult to grow vanilla in plantations, where it becomes susceptible to disease. But the humid heights of Madagascar offer the right climate for the plant to thrive. And the large pool of poor smallholders on the island provides abundant workers to grow this labour-intensive plant."
"Few Malagasys have much confidence in the state. A coup in 2009 scared away foreign investors and tourists. The soaring price of vanilla has been accompanied by an opportunistic crime wave: raiders rip out whole vines to transplant them elsewhere and armed robbers hold up warehouses. Estimates vary but upwards of 15% of the crop is stolen each year."
"Like vanilla farmers all over Madagascar, Raminisoa’s father and brothers now patrol their fields at night. They band together with neighbours and hired guards, and brandish machetes."
"Though Madagascar now produces 80% of the world’s vanilla, the vine is native to Mexico. The Maya were the first to cultivate it in the jungles of the Yucatan peninsular. They flavoured their chocolate drink with the spice. When the Spanish conquistadores arrived early in the 16th century, they took both cacao and vanilla back to Europe. By the end of the 18th century, Mexico was exporting a million vanilla beans a year to Europe."
"It took a young slave boy called Edmond Albius, working on a plantation in the French colony of Réunion, to discover a method for hand-pollinating vanilla flowers in the 1840s. His technique quickly spread to nearby Madagascar, where French administrators encouraged its cultivation."
"Häagen-Dazs shook things up. In the 1990s the company started selling its ice cream as a premium, indulgent treat. Their advertising campaign was sexy and risqué – beautiful people tempering their lust with a ball of the frozen stuff. It was a triumph of branding. The name Häagen-Dazs was confected to suggest European sophistication (the firm is American). The picture of a vanilla bloom on the carton drew attention to the vanilla extract that gave the ice cream its rich flavour. The Häagen-Dazs moment was one cause of the vanilla rush."
"Another one was broader and more recent. Over the past 15 years, food companies have faced increasing pressure from consumers to use natural, ethically sourced ingredients. Flavour companies began to trace beans back to their original villages and farms in order to earn certifications of fair trade and sustainability that commanded top prices. In 2015 Nestlé announced that it would eliminate artificial flavouring from its chocolates sold in America, citing consumer interest in more natural ingredients. Other multinationals followed. It didn’t hurt that the price of natural vanilla was low. Among artisanal and mass-market producers alike, flecks of vanilla became a proxy for quality."
"For many years Madagascar's government set the price of vanilla at around $80 a kilogram. Harvests were variable and sometimes ravaged by cyclones. A portion of the crop was stockpiled as insurance against years when yields were low. This forestalled shortages and prevented price fluctuations. Between 80,000 and 100,000 smallholders sold their green pods to middlemen known as “collectors”. These, in turn, sold them to preparers, who owned curing warehouses, or exporters (often Chinese-Malagasy families who had been in the business for generations). The beans were then bought by international traders or large foreign flavour companies such as Symrise and Firmenich in Europe, and Virginia Dare in America. These rendered the vanilla into high-quality extract to supply the big multinationals: Nestlé, Unilever, Mars."
"It was a stable if swampy system, but not all buyers felt they had fair access to Madagascar’s vanilla. In the early 1990s, as part of a wider privatisation policy, the World Bank insisted that vanilla prices be allowed to float. Yet no market institutions or regulations were put in place. In the ensuing free-for-all, the price of vanilla plummeted to below $40 a kilogram and farmers neglected the crop.
The path from pod to pot of ice cream is a long one and could not be hurried in the face of rising demand. Many vanilla vines grow on forested slopes and often lie several days walk from paved road. A newly planted vine takes three years to bear pods. Even once it does, says Henry Todd of Virginia Dare, it can take another two years for the fruit to reach a tub of ice cream."
"“The supply chain is long and complex and a little bit opaque because of the lack of infrastructure,” he says. For many years, collectors acted as the hinge in the market, linking farmers with exporters, the bush with the road. They brokered deals and financed loans.
After the market was liberalised – but before the current boom – exporters generally set the price of vanilla. They weighed the expected global demand against the size and quality of a harvest. But as demand rose, many collectors – the middle men in the system – tried to pay low prices to growers while selling to exporters for much more. By 2017, some exporters were paying exorbitant sums for poor quality beans. As the price mounted, speculation and stock-piling became rife. Several hundred collectors multiplied into thousands of middlemen frantically buying and selling, often to each other. Farmers played the market too, half curing their vanilla and then preserving it in vacuum packs until the price rose again. This created more fluctuations in the market and damaged the all-important vanillin content of the beans."
"I spent almost two weeks in Sava observing the vanilla market. Every time I thought I had worked out the relationship between supply and demand, quality and processing, the hierarchy of middlemen and the relative price of green and black vanilla, I found that a new factor – currency fluctuations, corruption, cyclones – confounded me anew.
"But why did the price rise so high? Though demand had risen, it hadn’t grown tenfold in three years. And although the Enawo cyclone blew through Sava in March 2017, it didn't destroy 90% of the vanilla vines.
In 2018, the price fell back a little to around $400, from a peak of over $600. Foreign buyers like Todd believe that the industry is still in “crisis” and publically rue the deterioration of quality caused by speculation. But privately, Todd and almost everyone else I speak to agree that money from the illegal rosewood trade fuelled the vanilla boom.Related posts:
Rosewood is a beautiful hardwood that grows abundantly in the forests of Madagascar’s national parks in the Sava region. It is prized for its deep-red hue, particularly by furniture-makers in China. Logging from national parks is illegal but has always been carried out on a small scale. But after storms toppled many trees in 2007, Madagascar’s president granted export licences to several traders to buy wood felled by “acts of god”. Some interpreted this as permission to start cutting down trees again. The brokers of illegal rosewood sales often operated in vanilla regions and had connections to vanilla collectors."
"In 2017 the quality of beans plummeted: so much green vanilla was being stolen from the vine that many farmers were picking their pods early and unripe. Even so, prices were higher than they had ever been. Todd and other buyers realised, with increased urgency, that the only way forward was to strengthen direct relationships with farmers and cut out the middlemen who were manipulating the market."
"I visited the Virginia Dare warehouse, where members of the Malagasy army were guarding $5m-worth of vanilla. Workers – mostly women – are frisked by hand every time they leave. An alliance of local vanilla networks, exporters and the military have tamped down the violence. But the benefits of the boom have been unevenly distributed. A small tax is supposed to be levied on each vanilla transaction, but most sellers sidestep this. Export taxes are imposed according to volume rather than value. The Malagasy government has made little effort to cash in."
"High prices have driven down demand [he should have said quantity demanded] by 30% from its peak, as food companies have started to incorporate artificial vanilla again. Some artisanal ice-cream makers no longer offer the most basic flavour. Gilles Marchal, a Parisian pâtissière, says that many of his colleagues have stopped using vanilla altogether. “When the price got to €500 ($560) a kilo they just said, ‘that’s enough’.”"
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