Vanilla production in Madagascar is expected to decline in 2022/23, following weak flowering in the key growing areas in the northeast of the island in the closing months of 2021. The output is expected to contract by about 13% from last year, according to responses Mintec has received from market participants for its July vanilla market update. Nonetheless, it must be stressed that the production is very likely to climb above the 5-year average of approximately 1,900 tonnes, owing to strong plantings in the past several years.
The quality of the new season crop is looking good, according to several key industry stakeholders. Concerns over the extended flowering period and underdeveloped beans at the time of the harvest do not seem to have materialised.
This has been confirmed in the Demeter Field Survey published by Thevanillareport.com where majority of local buyers of green beans in the Sava region declared that the 2022 crop mostly offers long and mature beans.
Several tropical storms and cyclones hit Madagascar between January and March 2022; however, weather-related damages in the northeast of the island where vanilla is grown were mostly minimal, according to market sources.
Some market players opine that Madagascar is now fully capable of producing a crop of 3,000 tonnes (subject to favourable weather). This is due to strong plantings in the past few years.
On the demand side, the US imported 1,283 tonnes of vanilla in the six months through June ’22, an increase of 38% year-on-year (y-o-y) and up 41% on the five-year average, according to data from the USDA. US imports bottomed in 2019 when the country shipped in just below 1,300 tonnes of vanilla, on the back of sky-rocketing prices and food manufacturers reformulating recipes. Nonetheless, imports have been steadily increasing since then (1,364 tonnes in 2020 and 1,739 tonnes in 2021).
Similarly, EU vanilla imports rose in the first five months of 2022, with the trading bloc shipping in 891 tonnes of vanilla during this period, up 63% y-o-y and an increase of 65% on the five-year average, according to data from the Eurostat.
Following the strong imports, vanilla stocks in destination markets are being reportedly replenished. A US-based buyer noted, “There is a lot of vanilla stock in the US. Companies have been importing as prices are good, and there is uncertainty over the minimum export price”. A food manufacturer confirmed this by saying, “Companies have pre-bought. There will be more buying to be done, but demand could be weaker going forward”.
Authorities in Madagascar have communicated that the $250/kg minimum export price on vanilla beans will be maintained for the 2022/23 export campaign. The Mintec Benchmark Prices for Madagascan vanilla continue to track in line with the minimum export price, at $250/kg.