10/01/2025
Bulan 12 2024 hari tu saya kongsi ke tak ek Aust Hachmann vanilla market report? Saja tengah clear emails, better just share it again.
Anyways, its downhere, after my blabbering .
Triggered because 2 vanilla beans suppliers/farmers/stockist contacted us, wanting to sell their beans. 1 from Papua. Another from NewPekan.
The outlook is not that good. Vanilla is a WANT, not a NEED. And since it is a WANT, it sometimes gave inaccurate indication, triggering what I call greed farming.
While farming greedily is fine virtually, but not when you are away from the screen.
And now, there is an obvious over supply. Well, stockist or traders will benefit at the beginning, hopefully 😉. Farmers, not so much at any point of over supply situation.
Am nya, as always, never put all your eggs in one basket. If you are a farmer, go for multicrops. If you are an investor, go for multi portfolios.
There many report and analysis out there. Don't just read one.
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Aust&Hachmann
November 2024
VANILLA MARKET UPDATE – NOVEMBER 2024
As Madagascar’s 2024 vanilla export season begins, the industry faces challenges reminiscent of those following the major vanilla market collapse in 2004, two decades ago. This report provides insights from a recent field survey conducted in the Sava region of Madagascar. Our views on other major vanilla-producing regions—Uganda, Papua New Guinea, and Indonesia—remain consistent with our May 2024 vanilla update.
From January to July 2024 Madagascar allegedly exported an impressive 4,300 metric tons of vanilla, almost 50% more than the estimated global annual demand for vanilla beans from all sources. This high export volume suggests several things:
The 2023 crop likely yielded more than initially anticipated.
Large industrial buyers capitalized on relatively inexpensive, good quality vanilla, securing their needs far into the future, potentially into 2025 given the sheer volume of exports.
In anticipation of a potential shortfall in the 2024 crop and increased government controls or taxes, some exporters chose to build vanilla inventories outside Madagascar. Now it appears the 2024 Madagascar vanilla crop may not be as small as originally predicted.
Buyers who purchased green vanilla early this season may experience financial strain.
Our outlook for the first half of 2024 requires recalibration based on the developments in the 2023 vanilla campaign and early indicators for the 2025 season. When the 2023 crop export season ended in July 2024, the green vanilla market for 2024 crop had already started, with green vanilla prices slightly exceeding those of 2023 due to the anticipation of a smaller crop. Exporters who engaged in the green vanilla campaign 2024 have a higher cost base than those buying vrac or bulk vanilla on the market today. This is why we saw higher prices at the outset of the campaign at the start of October. Combined with expectations of a short 2024 crop, exporters reasoned that modest price increases were justified.
Madagascar vanilla exports for the 2024 crop thus far have been minimal as buyers await price stability. This contrasts with January 2024, when explosive demand congested air freight to the point that many shipments were re-routed via Mauritius to avoid excessive shipping delays. Today, those who bought substantial green vanilla volumes face higher costs compared to those who waited for the “vrac” market, where prices are now significantly lower and continuing to drop. We have seen similar market conditions in the past, and it can be attributed to several factors.
When the 2024 crop green vanilla market opened in July, flowering for the 2025 crop had not yet begun. Since then, vanilla flowering has surged across the growing regions and continues to flourish. Reports of flowers falling off due to weather, over-pollination, and similar issues persist, but the early consensus indicates a potentially large 2025 crop. Even if a higher proportion of beans are shorter, it doesn’t alter the broader market dynamics. Since 2016, Madagascar has significantly expanded vanilla cultivation, and many of these plants are now reaching peak production. Flowering has occurred earlier than in 2023, suggesting a very mature 2024 crop as market conditions do not warrant early harvesting. Although the 2024 quality appears comparable to 2023, we remain concerned about early vacuum-packing practices, which certainly diminish overall quality. We hope the CNV (Conseil Nacional de la Vanille) addresses this issue as soon as possible as we feel overall vanilla quality could still be superior to what we see today on the market.
Despite government announcements of a fully liberalized vanilla market, an unofficial minimum price policy seems to persist. Exporters must present documentation to customs to determine acceptance, making it difficult to confirm a set minimum price. Estimates place this price between $50–$70 per kilogram, depending on quality. Until more vanilla is exported, the precise minimum price range remains unclear. The lack of transparency regarding the minimum price policy adds an uncertainty that exporters must contend with since additional costs are involved in order to ensure compliance.
Many local vanilla traders may have interpreted the high export volume last season as a sign of increased demand, perhaps assuming similar demand would prevail this season. Coupled with expectations of a short 2024 crop, this likely led some to buy aggressively during the green season, a move that now appears misguided.
In summary, we believe the Madagascar vanilla market is in the early stages of a prolonged period of oversupply and historically low prices, potentially lasting for years unless significant government intervention or climate-related disruptions occur. This opinion applies strictly to industrial grade vanilla and not to what is considered gourmet or food service quality. In a low- priced vanilla environment, there are fewer and fewer exporters who have the skills or patience to produce traditional cured and stable black vanilla. We believe true authentic black vanilla will always sell at a significant premium to industrial grade. As we have already seen this past season many exporters will attempt to sell high moisture industrial grade vanilla as gourmet quality to save time and cut costs. This usually results in a substandard, low vanillin, unstable vanilla.
Estimating the global inventory of unsold vanilla is challenging, but it likely remains high. Collectors, exporters (both in and outside of Madagascar), importers, and end-users are holding large stocks, with several thousand metric tons of unsold vanilla circulating globally. Although the 2024 crop will be smaller than that of 2023 it is expected to add another 1,500 metric tons to the market. If early predictions for 2025 are accurate, an additional 3,000 metric tons or more could be introduced by late 2025 or early 2026. This supply level would far exceed global demand, even before accounting for production from other regions, which will likely add another 750–1,000 metric tons annually.
While prices began the 2024 season slightly higher than in 2023, they are already trending lower, in line with market realities. It may take a month or two for export prices to align with ground-level conditions. In our view, there is no basis for prices to exceed those seen during the 2023 campaign. Once prices stabilize, buyers could consider one or two-year contracts with minimal risk. Absent unforeseen events—which are not uncommon in Madagascar—we foresee limited potential for any type of significant increase in industrial-grade vanilla prices in the near to medium term. The global vanilla market remains very much a “buyers” market.
Aust & Hachmann (Canada) Ltd
The market reports that we issue are based strictly on our opinions and observations. We believe we have presented a reasonably accurate portrayal of the global vanilla market in very general terms. The reports date back almost 20 years and are all available on our web site:
https://www.austhachcanada.com/reports/
AUST & HACHMANN (Canada) Ltd/Ltée
8162 Devonshire Road
Montreal, Quebec
Canada, H4P 2K3
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Reports November 2024Nov 15, 2024VANILLA MARKET UPDATE - NOVEMBER 2024 As Madagascar's 2024 vanilla export season begins, the industry faces challenges reminiscent of those following the major vanilla market collapse in...read more Novembre 2024Nov 15, 2024RAPPORT DE MARCHÉ DE LA VANILLE - NOVEM...
