afrol News, 19 August - After years of record world market prices for vanilla, the tropical crop is facing a crack. In Madagascar and Comoros, vanilla is a major foreign currency earner. The record harvests here are set to be sold at less than one tenth of the prices achieved only recently, spreading fears of a long-term disaster for the industry.
In the impoverished Indian Ocean state of Comoros, agriculture still contributes with 40 percent of GDP. Vanilla is the main cash crop and it is the main export commodity of the archipelago, where years of political turmoil have hindered investments in other sectors. Almost 70 percent of Comoros' total agricultural exports and 33 percent of all exports is vanilla, according to FAO statistics.
Neighbouring Madagascar is the world's leading vanilla producer, but the Great Island is comparatively less dependent on this crop, which represents 10-15 percent of total exports. Entire Malagasy landscapes, in particular in the north-east, however totally depend on the vanilla crop and its spin-off industries for their economic development.
During the last decade, vanilla prices have soared from about US$ 20 a kilo to record prices of up to US$ 300 during last year's vanilla scarcity. A devastating cyclone in 2000 and the 2002 political crisis in Madagascar heavily influenced this boom in vanilla prices.
However, those Malagasy and Comorans that were able to produce during the political and natural crises of their countries made record revenues during the last few years. The Antalaha region in north-east Madagascar - often referred to as the "world centre of vanilla production" - wealth accumulation among plantation owners and small-scale farmers has been tremendous. New built houses and four-wheelers are seen everywhere.
This year, north-eastern Madagascar has been spared political turmoil and the annual cyclones passing the island only affected a limited part of vanilla growers, which have been spurred to increase acreage due to high prices. Record harvests are thus being reported from Madagascar, while the comparatively small harvest in Comoros also is good. Also continental growers, mainly in Uganda and Mozambique, and Asian competitors cannot complain.
So far. As it in July became clearer that the forthcoming Malagasy vanilla harvest could beat all records, the London commodity exchange reacted with rapidly shrinking prices. Vanilla buyers at the end of last month forecasted that the Malagasy harvest alone would become more than twice as big as the annual world market demand of 1,000 tonnes.
Since mid-July, vanilla prices thus have been in the air, falling rapidly towards zero. Ugandan and Asian producers, who were able to market some of their vanilla during July, still achieved near-sustainable prices. As the Malagasy and Comoran vanilla now hits the market, however, producers will find it hard to pay their bills.
No one in Madagascar and Comoros expected last year's record prices to last forever. It was widely known that the country's own crisis - Madagascar produces 50 percent of the world's vanilla - had strongly affected the world market price. As harvests proved to become good, producers expected a drop to the still good price level of the 2000-02 seasons.
At the world's leading commodity exchanges, however, prices are crumbling to such a degree that ten years of positive developments in the industry are jeopardised. Reports from London indicate a 98 percent fall in prices compared to last year. Malagasy and Comoran smallholders and plantation workers are fearing the worst.
In north-western Uganda, where vanilla was introduced as "the green gold" only a few years ago, farmers broke out in riots as they were paid only fragments of what they had expected. As Malagasy and Comoran farmers now are to market their vanilla beans, prices will be even lower.
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