Mexico is said to be the birthplace of the vanilla bean, which belongs to the orchid family. This plant family (Orchidaceae) is said to be among the largest of all flowering plant families. The original inhabitants of Mesoamerica have cultivated vanilla since ancient times, and, after European contact and colonization, Mexico was said to be the first locale to send vanilla’s delicate flavors and fragrances to all the corners of the world. For quite some time thereafter they remained to be the leading vanilla supplier in the world, until around the middle of the 19th Century. Though they still remain among the top global producers of vanilla, Mexican producers have been unable to reclaim a position at the very top as African and Asian countries have claimed larger and larger stakes in the global vanilla market.
World Vanilla Leaders
Last year, the world’s largest vanilla-producing country was Indonesia, with an output of more than 3,200 tons of vanilla, barely edging out Madagascar, and far above the 463 metric tons from Mexico. This further highlights that the Mexican vanilla industry, relative to the global market, will have a long way to go to reverse their fortunes in market share, despite their long proud history of producing vanilla. Not far behind Indonesia, Madagascar’s vanilla production last year represented almost 41% of the total world population of vanilla. Madagascar, which had been the market leader for some time before, produced 3,100 tons in the year, part of a trend of an increasing trend in production of vanilla across much of Asia and Africa.
A Risky Spice for Investors
Natural vanilla is said to be the 2nd most expensive spice in the globe, second only to saffron. This is due to its intensively-involved methods of cultivation, which also makes the vanilla industry one of the world’s most volatile markets. For instance, a few years back in 2003, the price of one kilogram of vanilla was valued at record highs, which led to a rush of new market entrants with hopes of taking advantage of this lucrative crop. By 2010, however, prices had plummeted from that high point to less than $25 a kilogram. Such swinging of prices, and drought and fungal attack incidents, are driving growers and process in different countries, including Mexico, out of the market today and looking for more stable opportunities elsewhere.
Are Poor Job Markets Conducive to High Vanilla Output?
Due to the fact that vanilla production is highly labor-intensive in nature, countries with the lowest labor costs are favored. Countries such as China (with 335 tons last year) may struggle to gain much ground in the market because workers there are most likely going to demand higher incomes as the Chinese economy continues to grow. Ironically, countries with low growth rates, like Uganda, will have a long–term labor cost advantage within the vanilla market, and that’s one of the reasons they have been able to attain increasingly better positions in the vanilla market. Comoros remains a prospect to become listed among the top producers of vanilla in the world because, just like Madagascar, their major labor force component is found within the agricultural sector. It is estimated that at least 70% of the working population active in Comoros’s rural areas is involved in vanilla production.
The Rise of Synthetic Vanilla
Other countries like Papua New Guinea (433 tons), Turkey (290 tons), Tonga (198 tons), and Malawi (22 tons) make up most of the rest of the world largest vanilla production. Vanilla production can still be increased further by new methods of curing vanilla and exporting finished products, thereby eliminating the risks associated with the primary production of vanilla. Since the market may be affected by ‘synthetic vanilla’, which is being used in the majority of vanilla products on the market today, countries that are seeing a downward trend in natural production may be able to take advantage of synthetic vanilla, which is cheaper to produce and less volatile.
The Leading Countries In Vanilla Bean Production In The World
|Rank||Country||Tons of Vanilla Produced|
|4||Papua New Guinea||433|