Future of vanilla industry ‘promising’

Papua New Guinea was the world’s second-largest producer of natural vanilla, the world’s second most-expensive spice (after saffron), in 2018.
According to the World Bank PNG Economic Update 2019, despite strong competition from synthetic vanilla, shifts in consumer preferences had strengthened demand for vanilla beans over the past decade.
The update said PNG was estimated to have produced nearly 250 tonnes of cured vanilla beans in 2018. “The future of the vanilla industry looks very promising, largely due to the discovery of carcinogenic substances in the substitute artificial vanilla essence,” the report said.
“However, opportunities for a quick profit — including early harvesting and ‘bulking out’ shipments to increase weight — particularly in response to recent shortages, should be resisted.
“Instead, there must be efforts to build a reputation for quality, so that when Madagascan supplies return to normal levels, buyers will still value the Papuan crop, which will help to grow long-term markets for Papuan vanilla. Industry reporting indicates that recent Government actions to reduce smuggling to Indonesia and to increase awareness with local farmers on the importance of quality in harvesting is paying off.”
The update said while the high price had traditionally reflected significant labor intensity of cultivation, more recent years had seen steep increases owing to market speculation and weather-related supply-side disruptions in the world’s largest producer, Madagascar.
“Global prices have been over 1000 per cent higher than just five years prior, with the commodity soaring to over US$600 (K2000) per kg for the first time in history in 2017.
“Prices eased slightly to around US$550 (K1900)/kg at the end of 2017 on hopes of a good crop in Madagascar in 2018 before rebounding to near US$600 (K2000)/kg in early 2018 amid uncertainty over production levels.
“As of mid-2018, prices had returned to the lower end of the US$500-600/kg range and were expected to decline gradually over the remainder of the year.”
The update said vanilla shortage presented a short-term windfall for PNG farmers and a longer-term opportunity to increase global market share.