Synthetic vanilla- a favoured flavour?

- Last updated on GMT

Related tags: Vanilla

When Cyclone Hudah struck the island of Madagascar in April 2000
destroying 15 per cent of the world's vanilla crop the news sent
prices rocketing for the peoples favourite ice cream ingredient.

When Cyclone Hudah struck the island of Madagascar in April 2000 destroying 15 per cent of the world's vanilla crop the news sent prices rocketing for the peoples favourite ice cream ingredient - and they still haven't recovered.

Prices for vanilla are currently at an all-time high of $400-$500 per kilo, up from about $15 a decade ago. According to ITC/UN Statistics the total global demand for vanilla is about 2000 to 3000 metric tonnes a year with the world market for vanilla beans highly concentrated in a few developed countries.

The US, France and Germany account for about 80 per cent of world imports, the US absorbing 50 to 60 per cent, and France and Germany between 10 to 15 per cent each. These three countries are also major re-exporters of both vanilla beans and processed vanilla products.

Encouraged by the vanilla price hikes, a handful of countries - Papua New Guinea, India and Uganda - have since started producing vanilla, in addition to the major vanilla producing countries of Madagascar, Indonesia, Mexico and Comoros.

But is this move a double edged sword? Rocketing vanilla prices in the international market has naturally forced food manufacturers to look for alternatives, as such the global demand for synthetic vanilla is on the up. According to Raman Gujral from the Federation of Indian Chambers of Commerce, synthetic vanillin accounts for more than 90 per cent of the US vanilla flavouring market and about 50 per cent of the French market (the lowest national share). One ounce of artificially produced vanillin has roughly the same flavouring power as a gallon of natural vanilla extract.

In addition, synthetic vanillin costs one-hundredth of the price of the natural product and not only substitutes for vanilla but also supplements adulterated vanilla extracts.

At a time when global production is rising, could supply ultimately outstrip demand as manufacturers increasingly turn to synthetic alternatives? Will vanilla prices crash and what will be the impact on new entrants to vanilla production?

With giants such as Coca-Cola and Pepsi reporting healthy sales for their vanilla coke brands, a total collapse is unlikely. But the industry and farmers alike will be closely tracking crop harvests and market movements in the next couple of years, keeping a vigilant eye on price fluctuations

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