Cyclone Enawo shreds Madagascar – and its bourbon vanilla

Economics is fundamentally about supply and demand, and earlier this year, the supply side in Madagascar bourbon vanilla took a serious hit. Cyclone Enawo tore through the country, making landfall over the Sava Region on March 7 (the region accounts for about 80% of global vanilla production). According to media reports, at least 90 people died with about 247,000 now homeless. Many communities face a long road to recovery, with much of the country’s infrastructure destroyed and many necessities in short supply. While hoping not to trivialise events, the country’s most famous crop – Madagascar bourbon vanilla – fared no better.

Vanilla prices have spiked. From February 21 prices were already at a high of about $500 per kilogram, but that is expected to rise given the effects of the cyclone. Industry experts and suppliers predict vanilla prices to easily exceed the previous record of 2003, when prices were $525 per kilogram. Contrast this to about six years ago, when prices for vanilla beans were about $20 per kilogram! (This of course was before announcements by major food producers, such as Nestle, that they were switching to natural vanilla in all their products. There were other factors too, which will be discussed in an upcoming post). In summary, prices are only going to go up as demand far outstrips supply.

Here at Madanilla we are working closely with farmers to ensure our customers – and growers – get the best price possible. Please check here for our latest vanilla bourbon prices.

PS: If anyone was wondering about the cyclone’s unique name, it was the Mauritius Meteorological Services that named it after first identifying the cyclone.

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