Vanilla export earnings dive on price decline

Earnings from exports of vanilla have dropped drastically in the current financial year though there has been a marginal increase in the quantity exported.

During April-October this year, 18.42 tonne vanilla, valued at Rs 4.05 crore, was exported.

In comparison, earnings were Rs 22.91 crore from export of 15.05 tonne in the same period last year. Spices Board sources said this had happened owing to the sharp fall in vanilla prices in the global markets.

The average unit value realisation in the current year is Rs 2,200.05 a kg, while this was Rs 15,226.91 in 2004, according to Spices Board estimates. During the last couple of years, vanilla and vanilla-based products were rather hot in the global markets. So, Indian produce attracted better prices. But the scenario is different during the current season.

An improvement in production in Madagascar, a major producer of vanilla, and Indonesia has disturbed the price line in the current year. Madagascar had produced around 1,800-2,000 tonne, while production in Indonesia is quantified as 600 tonne. The global market size for vanilla is around 2,700-2,800 tonne.

In the current year, demand for vanilla could not pick up for various reasons. Hence, the average price for cured beans has dropped to $30-35 a kg, from $60-70 last year.

Meanwhile, the domestic market for vanilla has showed a promising trend in the current year, and experts feel Indian produce can be sold in the domestic market itself going forward.

Vanilla India Producer Company (Vanilco), which is the only agency to procure vanilla, is getting trade enquiries from major cities, and already had a tie-up with Amul for marketing its products such as vanilla extract and powder.

Paul Jose, managing director, Vanilco, told Business Standard Amul had already taken 200 kg of vanilla extract and would require 100 kg on a monthly basis.

Amul has decided to supply vanilla extract of 10 ml pack free of cost along with its products. It has also decided to add vanilla in its health drink 'Neutramul'.

The tie-up has made Vanilco to have a break-even point in the current fiscal, Jose said, adding that the company's turnover would increase to Rs 3 crore and it was expected to see profit for the first time this year.

He also said a lot of companies, especially from New Delhi, had approached Vanilco for distributing various vanilla products such as vanilla tea and coffee, vanilla perfume, vanilla sugar, crystal vanilla, besides extract and powder.

Vanilco has already procured about 130 tonne of green beans and is targeting 150 tonne in the current season, which is closes by December-end.

The company will also provide cardamom extract to Amul to use in its variedly flavoured drinks. Amul has, on its part, decided to shift to natural extracts in its products in a year.

Jose said as the domestic market was developing at a faster pace, marketing of vanilla products would not be a problem in the coming years.

EXPORT BLUES

During April-October this year, 18.42 tonne vanilla, valued at Rs 4.05 crore, was exported

In the current year, demand for vanilla could not pick up. Hence, the average price for cured beans has dropped to $30-35 a kg, from $60-70 last year

An improvement in production in Madagascar, a major producer of vanilla, and Indonesia has disturbed the price line in the current year

Vanilco has tied up with Amul for marketing its products such as vanilla extract and powder