This month vanilla prices shot up to $450-500 per kg for October direct from Madagascar, with most sellers of vanilla shifting their prices to cope with the supply shock this week.
Most of the large exporters who are our friends, fellows, and foes from Sambava and SAVA, found on www.madagascarvanilla.com (another site we provide as a reference,) have a concerted speech and spiel about why they just “have to” sell vanilla for more expensive since this year the “situation” or “reality” is very difficult. Everybody says the same thing. That’s because it is a prepared script to encourage speculation for higher sale price.
To counteract the ghost war on speculation (which turns price rumor to price reality if left unchecked,) many food and beverage conglomerates have put out indirect press on the internet that the prices are untenable and will fall when full harvest yield is realized later this year 2016. Other conspiracy extrapolations we have heard are even more interesting – Money laundering by Chinese illegal timber into vanilla as black cash is also true in Madagascar, but not to the tune of so much that it would distort the vanilla market.
Both sides have an incentive to lead or mislead buyers into believing one reality about the vanilla supply. Sellers like us have the natural economic push to tell buyers that the price will go higher or remain high. Buyers or purveyors of other vanilla origins have a natural incentive to tell their fellows that the price will go down eventually.
While the price may continue to rise, but eventually fall in 2017, we ask our friends and customers to think for themselves and do not assume this is always an actual function of supply and demand. Demand is increasing, that is for sure, but supply may be higher than last years by quite a bit too.
The cartel of Mada exporters is using Bernaysian tactics to try to hone buyer belief. It is not easy to find any commentators on the vanilla market of the world who aren’t peddling or incepting some agenda into reader’s minds. By the same token, there are various size suppliers and various qualities of vanilla even now sold in Madagascar that range from 500,000 ariary ($165) up to the stupid 1,500,000 ariary ($500). For inexperienced or desperate buyers, every single last one of these planters, chiefs, collectors, coops, or suppliers at every price in SAVA will tell you that their beans are good quality.
Reliable long term quality control and supply remains still a key to long term success in a year when horrible vanilla has made it out of the country through black market channels. The better sellers out there battle to get the best prices, and always will, but the best will not do this at the expense of the traditional bourbon quality or for anything less than truly grade A vanilla.
Feel free to write to us for on-the-ground recent information.