Vanilla Market Demand

Vanilla has been the world’s most popular flavor for over a century. Natural vanilla is highly sought after and its characteristics are regarded as markedly superior to synthesized vanillin. The International Trace Centre estimated production of natural vanilla at between 2,000 and 3,000 tonnes per year with overall demand of 28,000 tonnes, the difference being synthetic vanillin.

Vanilla prices spiked in 2002 to 2003 due to significant supply shortages which saw dramatic increases from US$ 50 per kilogram in 1999 to over US$ 500 per kilogram in 2003. Prices remain sensitive to reductions in supply providing growers who maintain supply with good market opportunities.

The use of synthetic vanillin is strictly controlled by government regulation in the United States, vanilla’s biggest export market for uses in confectionary such as ice cream. Demand is increasing at 10% per year driven by natural vanilla’s unmatched taste and purity. Although only 0.7% of international spice trade by volume vanilla accounts for 7% of the trade’s value.

Sources: FAO: Food and Agriculture Organization of the United Nations, ITC: International Trade Centre