8 November 2005

Uganda Farmers Shun Vanilla As World Prices Drop Sharply

Nairobi — Uganda's vanilla production is expected to shrink as the low price of the commodity on the global market has discouraged some farmers from tending their plantations.

Officials of the Uganda Vanilla Exporters' Association (Vanex), said last week that farmers in many of growing districts had not pollinated their crop after being frustrated by the low prices they earned in the just-ended season.

An average of $2.5 was paid per kilogramme in the previous season, compared with about $60 per kg realised by growers during the 2002-03 season.

Officials at the USAid-supported Agricultural Productivity Enhancement Programme (Apep) say that while a good harvest of about 600 tonnes of green vanilla beans was realised last season, about 10 per cent of the season's crop went to waste as disillusioned farmers abandoned ripe beans in the gardens. The average cost of producing a kilogramme of vanilla in Uganda is estimated at $1.1.

Apep says, in Uganda, this year's production of treated beans ready for export could exceed 200 tonnes, up from 70 tonnes in 2002 while the land under vanilla has grown to nearly 50,000 acres from 10,000 acres in 2001.

Huge global supplies and a lower vanilla demand are blamed for the current suppressed prices. "In the past three years, prices have risen from around $80 per kg of cured beans to up to $300 per kg or more, and down to under $40 per kg," said Juliet Namazzi, an administrator at Vanex.

It requires between five and eight kilogramme of green vanilla to produce one kilo of cured vanilla.

Ugandan exporters process the vanilla beans to a finished product which is sold as gourmet beans, while the lower grades are usually used for extracting vanillin which is sold to the food processing and confectionery industry.

In the 2003 harvesting season, Uganda exported 111 tonnes of cured vanilla from 666 tonnes of green beans harvested. In 2004, export figures fell to 65 tonnes of cured beans, which included a big carry-over stock from the previous season.

Vanex officials said only a tiny fraction of this year's crop has been exported, but could not give figures since harvesting ended only four months ago and there has only been limited export activity.

While officials at Vanex and Apep say they do not expect a reasonable price recovery over the next year, the fewer Ugandan growers sticking to the crop will get higher prices in 2006 than those realised this year.

"In 1998, we had a similar fall in prices but in 2000 there was a rebound," said Bashir Kasekende, the Vanex field director. "The good thing with vanilla is that even if the price is low there will always be market for it."

Christine Kiwanuka, a commercialisation specialist at Apep, says Ugandan exporters are exploring new markets for their crop, as traditional markets are no longer profitable. Some exporters are currently stuck with huge stockpiles of cured beans which they are reluctant to offload to a sluggish market.

Ms Namazzi said Ugandan vanilla has suffered quality problems after growers harvested immature beans during 2002-03 season when production in Madagascar, the world's biggest producer, was hit by bad weather and political instability.

"There are currently no control measures to ensure export of only quality products from Uganda," she said. "In other countries there is an official opening of the buying season based on when flowering takes place. This is not the case in Uganda, where the individual processor or exporter cures and prepares his vanilla to meet the requirements of his international buyers."

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