Spice Board frowns at vanilla farmers' loose talk on prices

The Spices Board has warned vanilla growers in the country to be cautious about exaggerated claims of high vanilla prices in international markets.

It has placed advertisements in leading newspapers in Kerala, warning vanilla growers and traders not to be misled by such claims. The board has said that the current average price of vanilla in the U.S. market is $50-55 a kg. For organic vanilla, the price is $70-80 a kg.

It has based these prices on data from the Web site of the U.S. Department of Agriculture.

According to the latest available USDA figures, the average price in January of vanilla from Uganda was $48 a kg, Papua New Guinea $36.52, and other countries $45.77.

The price of Indian vanilla was not recorded for January. The last price quoted for Indian vanilla by the USDA was $30.42 a kg for December 2004.

The US price is considered as the best indicator of the global vanilla price as it consumes nearly 70 per cent of natural vanilla.

"The misleading claims of high international price by vested interests have resulted in market distortions as most growers and traders kept the stock in expectations of further rise in prices," Spices Board chairman C J Jose said.

The total production in the country during 2003-04 cropping season was estimated to be around 85 tonne. Of this, only 23 tonne were exported, leaving 63 tonne with growers and traders. The Spices Board is still working out the production figure of the 2004-05 cropping season.

The cropping season for vanilla in India is November to January and the beans reach the market after four months. In Kerala, vanilla is a new crop, started three years ago.

"There is hardly any domestic market for vanilla so we can assume that growers and traders held back bulk of the 2003-04 production in the hope of higher prices. If the product came to the market in 2004, it could have fetched them at least an average price of 2,500 rupees per kg," Jose said.

In 2003, it fetched an average price of 4,000 rupees a kg. The price came down since then and is currently hovering around the USDA rate quoted above.

However, some persons claiming to represent farmers' organisations have been suggesting that processed vanilla would fetch much higher prices than quoted by the USDA, said the Spices Board.

In a pamphlet published on March 11, Vanilla Farmers Co-ordination Committee chairman P R Muralidharan claimed that the processed beans would fetch $250-350 a kg while Francis Thadathil, who claims to be another leader of vanilla growers, placed the price at $341.17 a kg on Apr. 5. Both have not disclosed their source of information.