The vanilla industry has cooled significantly since the tumult of ten years ago. Vanilla beans are relatively abundant worldwide, and prices have softened. However, the new administration in Madagascar continues to implement controls on the vanilla bean markets, which complicates the situation.
Madagascar exported an enormous 4,300 metric tons of vanilla in the first six months of 2024. Large industrial buyers capitalized on low prices, securing their future vanilla needs for several years to come. Buyers also anticipated a short 2023-24 crop.
Exports from Madagascar in the last six months of 2024 and thus far in 2025 have been minimal. Prices are falling again, as the VRAC (partially cured vanilla beans from previous years vacuum sealed and held for future sale) market is trading for significantly less than fresh green vanilla beans. The vanilla traders who interpreted the high export volume in the early months of 2024 as increased demand were misguided. They invested in green vanilla from the 2024 crop and are financially strained. This is accelerating another drop in the already collapsed vanilla market.
The global supply of vanilla is difficult to quantify; however, exporters both in and outside of Madagascar, importers, and end users hold extensive vanilla stocks.
Additionally, the Madagascar 2025 crop is expected to be abundant. Uganda produces 300-400 MT (metric tons), and Papua New Guinea and Indonesia produce another 300 MT annually, all adding to the global glut of vanilla.
Increased government controls in Madagascar are a concern. The Malagasy government continues threatening minimum price controls, limiting exporters, and imposing taxes on vanilla exports. The government claims the market is liberalized; however, they require exporters to present documents to customs, only allowing vanilla beans priced between $50-$70 per kilo to be exported. Bribery and corruption with government officials are rampant. The lack of transparency makes it difficult for exporters because they do not know what their final costs.
More conservative small exporters are blocked by customs, limiting their ability to ship the goods. More tenacious and aggressive exporters continue their ability to export vanilla beans at a high risk. Despite the strain on exporters, many exporters in the market offer quality vanilla at very low prices.
Vanilla extract prices in the US are under pressure. The market is very competitive in both the retail and wholesale sectors. Madagascar vanilla bean producers are aggressively entering the extract market, attempting to capitalize on value-added products.
Industrial users who switched to “Natural” products continue to reluctance to switch to pure vanilla products. The US Government and consumer groups are increasingly pressuring the industry to impose restrictions and regulations on “natural” products.
The vanilla market is in the early stages of a prolonged period of historically low prices and oversupply. This is especially true for extract-quality vanilla beans. Gourmet beans may be subject to higher prospective prices because of the extra curing expertise involved. However, gourmet beans are also subject to mold problems, so it is risky and unwise to stock them for any longer than 6 months.
To summarize, the vanilla bean market is unstable. The global supply of vanilla beans is abundant, and prices are falling, but there are significant challenges exporting vanilla from Madagascar.
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