Vanillanomics: Watching global market forces at work in the far reaches of Madagascar – by Monte Reel (Bloomberg News – December 17, 2019)

https://www.bloomberg.com/

First, we needed a 4×4 of some sort, along with a driver willing to chance roads that are sometimes passable, sometimes not. The man we found struck us as the quietly skeptical sort, but after a few hundred rutted kilometers, any hesitations he’d been suppressing hardened into emphatic certainties.

“The only people who drive on this road,” he told our photographer and me, via our translator, “are people who want to kill their cars.” Yet he gamely pushed ever deeper into Madagascar’s tropical north, until our mud road descended a hill and was swallowed by a wide river. It was the end of the line for the driver. He seemed relieved.

Somewhere on the other side of that water, dozens of farmers would soon converge upon a regional vanilla market in the village of Tanambao Betsivakiny. Growers would negotiate with buyers working on behalf of exporters and international flavoring companies, and together everyone would hash out a collective, per-kilogram price for the crop. Most buyers would pay cash on the spot, and the farmers would hand over several tons of green, freshly harvested vanilla beans.

Those humble beans, whose essence is associated with all that’s bland and unexciting, have somehow metamorphosed, butterfly-style, into the most flamboyantly mercurial commodity on the planet.

In the past two decades, cured vanilla beans have been known to fetch almost $600 per kilogram one week, then $20 or so the next. Northeastern Madagascar is the world’s largest producer of natural vanilla, so every boom and every bust slams this region like a tropical storm. When prices peak, cash floods the villages. When prices fall, it drains away.

For the rest of this article: https://www.bloomberg.com/features/2019-economics-of-vanilla-markets-madagascar/

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