G. K. Nair

"Nobody is sending a firm reply to the offers made by the producers and hence, it is not going to be encouraging this year."

Kochi , Oct. 25

THE global demand for natural vanilla this year is projected to be less than 1,000 tonnes as against 2,500 tonnes in 1999, as major buyers in the US are yet to enter the market.

Whereas, the world output is estimated at around 2,200 tonnes, since the new entrants have started producing. Indian production this year is estimated to cross 125 tonnes of cured beans from around 100 tonnes last year. Lack of demand has put the growers in difficulty and the prices offered are very low.

Though some buyers in Kerala are said to have offered Rs 250 a kg for fresh green beans, by and large, they are being bought at Rs 85- 90 a kg in most of the areas in Kerala and other producing States, industry sources claimed.

"At this rate, cured beans could be sold at $15 a kg," the sources claimed. The major buyers in the world market, mainly in the US, have to deplete the stock held by them from the earlier purchases before entering the market, they said. "In fact, nobody is sending a firm reply to the offers made by the producers and hence, it is not going to be encouraging this year," said a senior official of a major vanilla plantation company. "The price might stabilise at $50 - $60 a kg next year," he predicted.

According to a recent market study of natural vanilla by F. J. Koekoek, natural vanilla experiences strong competition on two levels, he said. "Within the vanilla flavour category, there is competition from synthetic vanilla, or vanillin. Vanillin is the major flavour constituent of vanilla, but it is produced through various bio-technological processes, which continue to be developed. Although natural vanilla contains many more flavour components than just vanillin (several hundreds have been identified), the difference in taste with synthetic vanilla is hard to detect in most applications, especially for the untrained mouth," said the study. Vanilla has a strong position as one of the world's most popular flavours. It is especially popular in ice creams, beverages, desserts, dairy products, chocolate, confectionery products and pastry. Recent high profile introductions such as Vanilla Coke confirm this popularity.

While the vanilla flavour experiences strong and growing demand, within the larger category, real vanilla is increasingly being substituted with synthetic vanillin. This substitution was catalysed by the limited availability and extreme price increases in 2002 and 2003, the study said.

Demand for natural vanilla showed continuous growth throughout the 1990s, in spite of the huge price difference at that time. On the other hand, this trend is now balanced with increasingly price-conscious consumers and other concerns. The demand for the natural variety of vanilla is probably only decisive in the gourmet segment. "In the mainstream segments, there is a strong tendency to "cheat," i.e. to use more economic vanilla substitutes, especially since this is not easily noticed by the average consumer," it said.

According to analysts, the global demand in 2004 fell to 1,100 tonnes from the 1995-2000 average of 2,000 tonnes. "Although analysts expect that the market will partly recover when prices come back to normal, this will not be easy, since both flavour producers and food manufacturers have changed their recipes — and probably their strategies," said the market study.

Given this scenario, the study added, "Countries need to produce in the range of $30-$50 a kg for Bourbon-like vanilla beans (FOB) in order to be competitive. But even that range may be too optimistic, and it would be better to produce in the range from $10 to $30."

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