March 16, 2005

...AND CHEAPER...:

Vanilla prices drop by as much as half (Elizabeth Lee of Cox News Service and Aleta Watson, 3/16/05, San Jose Mercury News)

Vanilla prices are a product of both weather and politics, says Patricia Rains, a Santa Cruz vanilla seller and author of ``Vanilla: The Cultural History of the World's Most Popular Flavor and Fragrance.'' They cycle up and down depending on how many beans get to market.

Prices, which had fallen to $10 a kilogram (2.2 pounds) in 1998 after Madagascar deregulated its vanilla market, started climbing in 2000, she says. That year a cyclone in Madagascar wiped out about 30 percent of the world's supply. The year before, a flood had taken much of the Mexican crop.

Since vanilla plants take two to three years to mature, there was no quick recovery, and prices peaked at around $500 per kilo at point of sale in Madagascar in late 2003, Rains says.

Nielsen-Massey Vanillas, a major supplier, saw its cost for beans go from $50 a kilogram to nearly $600 over the past five years, says director of sales Dan Fox. To ease sticker shock for home bakers, Nielsen-Massey introduced a smaller, two-ounce bottle, and McCormick rolled out a blend of real and imitation vanilla.

Meanwhile, more farmers brought their beans to market, and many big ice cream makers, bakeries and confectioners switched from pure vanilla to synthetics. Prices plummeted to $80 per kilo last November and December.

Posted by Orrin Judd at March 16, 2005 12:59 PM
Comments

Which leaves the beans still eight times the low price. You consider that cheaper?

Posted by: Annoying Old Guy at March 16, 2005 10:48 PM

Not cheaper than at its lowest.

Posted by: oj at March 16, 2005 11:11 PM

So, everytime some commodity drops in price you believe that everything gets cheaper? Prices go up and down every day, but trends last longer. Most commodities are in an upward price trend right now, and with global demand rising with the Asian boom, will continue in that trend for some time.

Do you think we can run our cars on vanilla?

Posted by: Robert Duquette at March 17, 2005 2:28 AM

No, I think everything always gets cheaper because it takes us fewer minutes to earn enough to buy each item every year. The discrete price fluctuations are quite meaningless.

Posted by: oj at March 17, 2005 6:54 AM
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