High Vanilla prices Disrupt Production in Madagascar Africa
The sweet flavors of vanilla are taking on a bitter edge for buyers in Madagascar as prices have almost quadrupled but quality has declined, with experts blaming speculation, money laundering and a poor harvest.
Madagascar, producer of 80 percent of the world's vanilla, has seen the spice's price jump from about $60 per kilogram (2.2 pounds) in 2014 to as much as $220 now.
In some local supermarkets, vanilla -- used in everything from ice cream to cakes -- has become so expensive that the pods have been removed from the spice aisle and placed close to the cash registers to deter thieves.
"The 2015 harvest was not excellent, about 1,200 tonnes compared to 1,800 the year before," Emmanuel Nee, head of the ingredients department at French spice trading company Touton, told AFP.
"But that doesn't justify the huge price jump we've seen this year," he added, instead blaming "extremely speculative" traders and an "irrational" market.
Dominique Rakotoson, head of a Madagascan family-operated vanilla company and one of the few people willing to talk on the record, pointed to large operators for stockpiling and hiking up prices.
Half of Madagascar's vanilla is exported to Europe, and a third to the United States -- but the island is not seeing the potential benefits of higher prices.
"Some buyers abroad have now cancelled or reduced their orders," said Rakotoson, while food production companies are turning to cheaper synthetic vanilla as an alternative.