Madagascar vanilla producers say cyclone damaged 30 percent of crop

ANTANANARIVO (Reuters) - Vanilla producers on the tropical island of Madagascar say a cyclone that killed 78 people has also damaged around 30 percent of the crop in the world’s biggest producer.

The valuable beans are often kept under armed guard after prices shot up from around $20 a kg in 2010 to around $500 a kg last year.

A U.S. buyer supplying ingredients for supermarkets Trader Joe’s, Whole Foods and coffee chain Starbucks said she expected prices to jump.

The flavoring is used in products from ice cream to coffee. Madagascar produces nearly half the world’s crop, according the U.N. Food and Agriculture Administration.

In 2015, Madagascar was estimated to have produced 3,914 tonnes out of a global total of 8,294 tonnes, projected U.N. data showed. No more recent data was available because of the lag in harvesting time.

Cyclone Enawo tore through the East African island last week. On Tuesday, authorities said the storm had killed 78 people, displaced nearly 250,000 and wounded 250.

“The destruction of uprooted fields and plants (means) losses are estimated at 30 percent,” said Mamy Razakarivony, president of the national vanilla exporters’ group.

He said he feared higher prices would drive away buyers and that locals would sell immature vanilla pods damaged by the storm, introducing poor quality vanilla to the market. The harvest will not be ready until July.

“High prices and poor quality vanilla: this announces a catastrophic season,” he said. “People are already starting to pick up the immature vanilla that has been pulled out due to the cyclone.”

Reuters data shows the price for black non-split Madagascar vanilla is currently at $487.50 per kg. Black non-split vanilla from India is $420 per kg, and from Papua New Guinea it is only $210 per kg.

“The market is so volatile that it jumps on any news,” said Josephine Lochhead, the president of the 100-year-old U.S.-based Cook Flavoring Company, which supplies ingredients to Trader Joe’s, Whole Foods, and Starbucks.

Producers in Papua New Guinea and Indonesia were negotiating prices of $500 per kg for the spring/summer harvest, she said.

“They are feeling out an excited market but we don’t know where it is going to land,” she told Reuters.

She said increased planting due to record profits, and consumers turning to artificial alternatives because prices were so high, could help dampen prices.

Eddie Fernand, mayor of the Antalaha region, said years of spiraling profits meant many locals had poured all their resources into vanilla farms. Around 95 percent of his region’s crop had been destroyed, he said. Now some families face ruin.

Additional reporting by Katharine Houreld in Nairobi; Writing by Katharine Houreld; Editing by Alison Williams