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Guest Column: Vanilla Market Report

Posted: September 22, 2008

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Buyers of green and bulk vanilla are calm. There is a lack of finance as these buyers hold stock both in the producing and consuming countries; this calls for banks to be careful and limit their pre-financing to some, not all, of the actors. Buyers of cured vanilla have been quite active, particularly in July, covering some of their needs through 2010, apparently.

In fact, buyers are buying in the expectation that prices will rise in the near future, while sellers hold onto part their stock for the same reason. All this probably means prices will be stable until the end of the year, somewhat on the up trend, provided news of the new crop are not too disturbing.

Two natural factors are playing one against the other: on one side, Phytophthora parasites are spreading every day and are now present in most of the vanilla fields in all regions; on the other side, the new crop is quite early and large: flowers are everywhere and in some cases, pollination has begun.

Some read this phenomenon as the sign that the vanilla is dying out and coming out with a last “swan song,” as a response to illness, increasing its flowering in order to survive. Those are the bullish actors, often exporters. Meanwhile, the bearish actors (those not directly involved in the speculation) say we are facing a vanilla glut and shall have a 2,000 ton crop. Let us wait for December and organize scientific counts, which will allow some form of forecast.