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Guest Column: Vanilla Market Report

Posted: April 23, 2008

As with most commodities, the vanilla market goes through repetitive cycles, meaning that operators have to manage long or short positions. Long positions are generally speculative, involving an expectation of consumption resuming and prices going up. This is the case for vanilla today. The question then is: when will the market resume its upward trend? The answer is: probably today.    

Due to low prices, vanilla consumption has resumed its growth in recent years. That upswing came not in traditional niches such as premium ice creams, nutraceuticals and (occasionally) sodas, but rather via expansion into new markets and countries, including China. All told, the market bought 3,500 tons of vanilla in 2007 at prices ranging from $15 to $25. These figures are partially the result of anticipatory buying, such as making purchase for the first quarter of 2008 (or, in some cases, as late as 2009) in mid-2007. 

Consumption Totals

Estimated consumption figures are as follows: 1,900 tons in North America; 500 tons in Europe; 120 tons in Japan; and 150 tons elsewhere. Consumption in the United States was destined for industrial extraction and a vigorous family extract business. Europe, like Japan, is still very much in a “vanilla de bouche” mode, taking a gourmet approach to the commodity, which puts the bean in a blister and keeps cooks, pâtissiers, glaciers and the like pretty active. That accounts for a great deal of lot of vanilla. One might doubt these quantities if, year after year, the import figures were not confirming that the world is consuming some 2,700 tons of vanilla a year—and not just home-grown stocks. 

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