The minimum export price of Madagascan vanilla has been lowered to $250 per kg, effective from 15th July 2020. Previously, the Malagasy authorities introduced a minimum export price of $350 per kg back in February this year in an effort to protect farmers and traders in Madagascar from the weakening vanilla market.
Prior to the Malagasy government implementing a new bottom on the export price, vanilla prices had been on a downward trajectory. The Mintec Benchmark Price for gourmet grade vanilla declined steadily from $650 per kg in 2017 to $310 per kg in February this year, on the back of dwindling demand and growing supplies.
The latest move to lower the export price by $100 coincides with vanilla harvest in the Sava region (where most of the crop is produced), which is now in full swing. The new lower export price has been at the centre of rumours over the past few weeks and reflects on anticipations of a large 2020 vanilla harvest in Madagascar, coupled with persistently weak demand throughout the supply chain.