Green gold takes a beating from weather and technology
September 12, 2004
They call them "green gold" in Ntenjeru. The long, curving pods that hang among the banana trees are so valuable that security guards are employed to protect them.
The gold is the fruit of the orchid species, vanilla planifolia, better known as plain vanilla. Discovered by Mexican Indians, the heady seed has developed into an industry worth £2 billion (R22 billion) a year, flavouring the tastes of rich Western economies.
In places like Ntenjeru, a lush corner of Uganda on Lake Victoria, and the island state of Madagascar, the world's largest vanilla producer, four years of rapidly increasing prices have brought a rare windfall, funding luxuries such as full-time education, permanent roofs, four-wheel-drive vehicles and even extra wives.
Samuel Wataala, who has two acres of vanilla vines in Ntenjeru, says: "Vanilla has brought development. Many people here were living in grass huts. Now they have permanent homes. Some men have married new wives. There are many Toyota Land Cruisers."
But all is not well in the vanilla plantations of the developing world, which stretch from Papua New Guinea to the Comoros islands in the Indian Ocean.
"Times have been good but this year they will not be. Farmers have pulled up their crops because now it is worthless," Wataala continues.
In 1990, vanilla pods sold for $15 (R100) a kilogram. Last year, the sweetest spice of all, cured in the equatorial sun and shipped around the globe, was fetching up to $300.
So deeply in demand was the vanilla bean that a single, shrivelled, brown pod sold for up to £5 in UK supermarkets, destined to flavour exotic puddings and the sugar jars of the nation's foodies.
But by this week, when hundreds of tons of raw, green pods were being gathered in Uganda, and Madagascar was preparing for the biggest harvest in its history, the price of vanilla had plummeted more than 98 percent to $4 a kilogram.
So, one of the success stories of equitable trade between the developing world and the wealthy West (90 percent of pure vanilla goes to the US, France and Germany) is looking distinctly one-sided. The reason for this catastrophic decline is twofold.
Much of the recent bonanza was due to Cyclone Hudah, a tropical storm that tore through Madagascar in 2000, destroying a quarter of its crop and causing a global shortage of natural vanilla.
More worrying for the world's vanilla farmers, most of whom are smallholders with little more than an acre of this most labour-intensive of crops, is that the shortage has spurred their Western customers to turn to an unlikely alternative for their exotic flavouring: rice husks and stainless steel fermentation tanks.
Food and drink producers, who have suffered dents in their profit margins caused by the vagaries of fluctuating vanilla prices, are turning to biotechnology to produce their vanilla flavour by fermenting bacteria with cereal waste.
The cutting-edge science, its proponents say, has achieved a goal that had long eluded food technologists: a synthetic vanilla that tastes like the real thing. It is also a science, which some producers of natural vanilla fear could put them out of business.
Claude Andreas, the president of Gesav, one of Madagascar's largest vanilla producing co-operatives, says: "The biggest threat is biotech vanilla. If we don't meet this challenge the danger is that we will be put out of work by chemical works."
Growers admit the see-sawing yields and cost of their crop is driving users of natural vanilla extract into the arms of the suppliers of this new technology.
The annual demand for raw vanilla is estimated at 2 000 tons, but since the pods contain just 2 percent of vanillin, the main active compound that gives vanilla its flavour, the total global output of vanilla extract is 40 tons.
This "elite" vanilla mostly goes into up-market products, including premium ice creams and even whiskies. It is also an ingredient of the world's best-selling soft drink, Coca-Cola.
But the output of natural vanilla extract is far below the worldwide demand for vanillin, 12 000 tons of which is used in mass-produced foodstuffs from biscuits to beer.
To meet this demand, many manufacturers have used an inferior, chemically produced version of the compound. Now French-based biotechnology giant Rhodia has perfected a new version of vanillin, Rhovanil Natural, made by fermenting rice bran with a harmless bacteria, that tastes like the natural compound.
It is produced in steel vats at a state-of-the-art plant in Lyons. At about €800 (R6 480) a kilogram, it costs vastly more than the chemically produced synthetic vanillin, but is significantly cheaper than natural vanilla extract.
Rhodia refuses to disclose the scale of its production but says demand is doubling every year.
Dominique Gianotta, the global marketing manager for Rhovanil, which has been registered as a trademark, says: "An independent panel found this product is more natural in its smell."
Gianotta says Rhovanil Natural is unlikely to force vanilla farmers out of business but contends that the inconsistencies of the natural crop give Rhodia an opening in the market.
Producers of flavourings for food and drink say they are increasingly using "nature-identical" vanilla compounds because of the cost savings.
Danisco, a Danish-based firm that ranks among the largest producers of food ingredients, has devised two new vanilla "systems" to be added to spirits. Samantha Forgham, Danisco's beverages manager, says in a trade magazine: "When using a vanilla replacer as a toner or smoother to a high-proof spirit, we can show savings of about 50 percent based on today's price of vanilla extract."
Samash Nathu, the chief executive of Magellan Worldwide, which supplies five tons of cured vanilla beans from Uganda every year, says: "There will always be a premium for genuine vanilla beans, but people are finding the substitutes more and more acceptable."
The result is a sense of crisis in the vanilla industry, a normally sedate trade where each plant takes three years to mature, is pollinated by hand then takes nine months to produce a pod. The beans are cured by being briefly boiled, dried in the sun, then processed into an alcohol-based extract or sold whole.
When the Ugandan harvest started this month, there were reports of riots by farmers complaining at the crash in prices.
Impoverished landowners, trying to protect their crops from thieves, cannot afford professional security guards, who would cost perhaps a quarter of their likely income from their crop.
Vanilla farmer Francis Kiyaga says his neighbours have resorted to rudimentary means to protect their crops. "Some can't afford the security guards, so they make do with a guy with a bow and arrows."
In Ntenjeru, a villager was beaten to death and his body burnt by a crowd after he was caught trespassing on a vanilla farm.
Aga Sekalala, the managing director of Uganda Vanilla Producers and Processors, says: "It's like any commodity, like coffee, like soya beans. People wanted to cash in and in the end the price had to crash. But getting these farmers to understand is a very big problem."
Privately, growers and exporters admit that technology, rather than price, threatens to erode the status of their precious pods as the unique source for the world's headiest flavour.
Nathu says: "They have just announced in Brazil that they've isolated the gene code for coffee. They want to produce a perfect, uniform coffee. It is just a matter of time before they do the same with vanilla. When that happens we will have lost one of the last wholly organic and unique crops." - The Independent
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