Vanilla World Association to be Formed

By: PNG Business News March 03, 2024

The Trade Ministers for Papua New Guinea (PNG), Madagascar, and Comoros have agreed in their three-way bilateral meeting that they would work together to establish a world association for vanilla growing nations. The meeting was held in Abu Dhabi, United Arab Emirates (UAE) on the margins of the World Trade Organization (WTO) 13th Ministerial Conference (MC13). This association is proposed by Madagascar which is currently the world’s leading vanilla producing country leading the global market with over 60 per cent of exports and generating approximately USD1 billion a year for the country. Madagascar has over 1 million vanilla farmers out of their population of almost 30 million people.

Madagascar Minister for Industrialization, Trade and Consumption, Hon. Edgard Razafindravahy said: “This organization will address the issue of price instability, sustainable development of the industry, threats to the value chain, search for new markets, and production of natural vanilla to consumers around the world. The creation of the organization will make it possible to establish a mechanism for setting prices according to quality and in terms of sustainable development, the organization will promote sustainable practices that will not only guarantee vanilla quality but also fair income for farmers. Through this organization we can also strengthen the value chain which includes development of strategic partnership, search for new markets for natural vanilla, and development of the vanilla industry. The organization will also be a powerful tool for promoting natural vanilla worldwide and raising consumer awareness on responsible vanilla consumption.”

PNG Minister for International Trade and Investment, Hon. Richard Maru said PNG was keen to join the association as one its foundation members if the association would look at increasing prices for the farmers to encourage them to plant vanilla and grow the industry on a long-term sustainable basis instead of the constant too frequent fluctuations which has been very discouraging for our farmers in PNG. Minister also asked Madagascar as the world’s leading vanilla producing country to assist PNG by proving technical support in terms of farmer training, improving quality of vanilla, and helping to build the industry in PNG.

Minister Maru said: Compared to Madagascar, PNG is a small producer of vanilla. Based on recent research, PNG is estimated to produce 495 tons of vanilla a year which equates to 10 per cent of the global vanilla supply and the vanilla market in PNG was valued at K29.9 million in 2023. We have a lot of scope for increase in terms of our production of vanilla but the issue that have really undermined the growth of the industry is price instability and regular price fluctuation which has made it difficult to maintain farmer interest. Unlike cocoa and coffee where we have the world market prices, vanilla prices fluctuate too often and therefore it is not attractive for farmers and this is a challenge that hopefully the organization that is being initiated will support so we can maintain high prices in order to maintain the farmer interest at all times. The other area is quality- higher the quality the better the price. We need processing technology to maintain quality at the highest level and the farmers need to be trained so they do not harvest the beans when they are not ready to be harvested. Another issue is the market for our vanilla. In PNG, we have a land border with Indonesia, so our farmers just walk across the border and sell the beans to Indonesian buyers, but they do not know if they are selling their vanilla beans at the correct price or not because they are not aware of world market prices, who is offering what prices, and how to access those global markets.”

Minister Maru further stated: “This association is only worth forming if the volume and demand for natural vanilla will grow because the most serious threat to the growth of the industry is artificial vanilla. The association will have to work hard to ensure that people will continue to prefer natural vanilla so that the industry can grow into the future.”

With Madagascar, Comoros, Uganda, Indonesia, and PNG being the only five vanilla producing countries, Minister Maru suggested to his counterpart from Madagascar to invite all Trade and Agriculture Ministers of these countries to meet immediately to have an initial meeting about incorporating and establishing world association for vanilla producing countries and be the foundation members of this association.

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