Vanilla Boom in Madagascar: A Bittersweet Journey of Rising Demand and Economic Instability

McCormick All Natural Pure Vanilla Extract, 16 fl oz

By: Insider Business

The rising global demand for vanilla, the second most expensive spice after saffron, has created an unstable yet profitable sector in Madagascar, which contributes around 80% of the world's supply. Even though the price of vanilla has skyrocketed in recent years, hitting a high of approximately $600 per kilo, surpassing silver's value, the African island nation remains one of the poorest globally. The combination of unfavorable conditions, such as inflation, crop theft due to poverty, risky farming practices, and price volatility, creates a toxic environment. However, co-operatives like Sahanala that buy directly from farmers are trying to provide stability with consistent pricing and eliminating exploitative middlemen.

The Madagascar government's efforts to stabilize the vanilla price have backfired, causing many global customers to seek cheaper alternatives from other nations or synthetic vanilla. The price fixing measures not only drive inflation making things costlier, but it is also causing the country to lose its business to other nations selling at lower prices. Despite vanilla's potential to change Madagascar's economic landscape and although measures are being taken to protect this "green gold", the uncertainties of price instability, poverty, crop theft and changing demand make the industry's future unsure.

#Vanilla #Madagascar #Poverty #Inflation #SpiceTrade