Why is vanilla so expensive?

from ice cream to cakes and even perfume vanilla is the go-to flavor the world over in recent years the price of natural vanilla has shot up at one point it was more expensive than silver by weight 80% of the world's vanilla is grown in the perfect lead climate of the Northeast region of Madagascar it's the country's primary export crop for the farmers like Benny Oh Don life's far sweeter when the vanilla price is high the alchemy 11 even it's nothing patrol additionally we confine actually the venison Mesa fluctuating in 2014 vanilla was 80 dollars a kilo three years later it was 600 today it's around $500 the price rises due in part to global demand the trend of eating naturally means that food companies have shunned synthetic flavoring in favour of the real deal penny and the other farmers are cashing in the una prisa decision affirmed our own movie Avatar Tara pianta loudly Charlie Feeney but things can change very quickly price fluctuations affect producers of agricultural commodities everywhere but vanilla is particularly volatile in just a few weeks the price can jump or plummet by over 20% dang Amazon or Sofia I had seen the busy city surrounded liberalization is one reason for such movements the Malagasy government once regulated the vanilla industry and its price but now the price is negotiated at the point of sale which makes for a freer market but a more volatile one it's also a tiny industry a single cyclone can knock up the entire crop with in Madagascar it's also a difficult and delicate crop to grow vanilla is an orchid that needs to be hand pollinated this is a really really labor-intensive practice if anyone has grown a an orchid at home you experience how difficult it is to keep an orchid alive in your house now try growing this in the middle of a Malagasy rainforest it takes roughly six months to grow it on the vine and then six months of manual post harvesting now the interesting thing about vanilla is you need to take it off the vine when it's almost rotted the growers have to contend with another problem thieves are targeting the vanilla crops so Malagasy now are sleeping out in their vanilla fields they can't rely on those who are charged from the state to protect them or protect their crop they're having to take matters into their own hands and this has really caused some some problems vigilante justice and a whole host of other violence connected to vanilla some farmers have resorted to harvesting the beans before they're right but this produces a poorer quality vanilla and ultimately pushes down the price the combination of deteriorating quality and high prices is having an effect the vanilla price bubble may burst of the price continues to stay high there's a number of scenarios that play out we can continue as as we are now and have a relatively unstable market where farmers are growing vanilla under very very distressful conditions of theft and violence you could have the state and corporate sectors afton violence try to reregulate the market in some way that might stabilize prices and also quality or you might just have the market crash up big buyers that provide vanilla for the likes of haagen-dazs and Ben and Jerry's and now working directly with farmers in a bid to gain greater control over quality other companies have started to look elsewhere for their natural vanilla Indonesia Uganda and even the Netherlands are growing the crop for a century Madagascar has enjoyed a near monopoly on vanilla but this industry may be in line for a radical overhaul

Channel: The Economist

Views: 2,229,282

Keywords: The Economist, Economist, Economist Films, Economist Videos, Politics, News, short-documentary, vanilla, why is vanilla so expensive, vanilla beans, vanilla prices, why is vanilla expensive, madagascar vanilla production, business news, why vanilla is so expensive, why vanilla is expensive, vanilla cost, madagascar vanilla, madagascar vanilla documentary, madagascar vanilla bean

Id: oguPMXcrOVY

Length: 5min 19sec (319 seconds)

Published: Wed May 15 2019