Fanja Saholiarisoa, PlanetArk 27 Apr 09;
ANTANANARIVO - Madagascar's vanilla producers expect that a double hit from destructive cyclones and a deadly political crisis will cut output of the food flavouring and hurt buyers' confidence during the 2009-2010 season.
Three tropical cyclones have torn across the Indian Ocean island since January damaging crops while producers fear that a power struggle will prompt importers to buy from elsewhere.
Vanilla is a key source of foreign exchange for Madagascar -- the world's leading exporter -- earning the nation an estimated $148 million in 2006. The country expects to ship 1,500 tonnes this year compared with 1,800 tonnes last year.
"The fall in foreseen exports this year is directly linked to the consecutive cyclones which destroyed 15 to 20 percent of the vanilla crop," said Jeannot Ranjanoro, president of the National Grouping of Vanilla Exporters (NGVE).
Local industry leaders say Madagascar supplies 80 percent of the world's vanilla while the United Nations said the island met 60-75 percent of the global market between 1990 and 2005.
Vanilla prices peaked at $600 per kg in 2003-04 but have fallen since, according to a UN report. Last year, it sold at around $19-20 per kg.
Earlier this month, cyclone Jade hit Madagascar's north-east. The storm killed 15 people and damaged up to 63 percent of the vanilla and coffee crops in the single province of Antalaha, according to the emergency management office.
Ranjanoro said that Madagascar's lost crop was unlikely to affect prices on the world market.
One reason for that was a surplus of supply last year, said Nissi Randriamanana, manager of Trimeta sales, a private company able to cure and export more than 500 tonnes per year.
"There remains 2,500 tonnes of vanilla left over from last year in the hands of traders," he told Reuters. Of that, an estimated 700 tonnes is Malagasy vanilla.
POLITICAL CRISIS
Randriamanana said the surplus may allow producers to ride out the nation's leadership struggle between ousted leader Marc Ravalomanana and Africa's youngest president, Andry Rajoelina.
"Buyers are turning to these traders (holding surplus stocks) while waiting for the situation on the island to calm down," said Randriamanana, warning that a protracted crisis would dent the country's reputation.
Rajoelina took power last month after weeks of civil unrest killed 135 people. Ravalomanana maintains he is still head of state and has called for elections before the end of 2009.
"If the crisis continues, we risk foreign buyers losing confidence in Madagascar," Randriamanana said.
Players say that there is a four-month window of opportunity for stability to be restored. "Exportable vanilla will not be ready for the next four to six months," said Andreas Claude, a local business leader in the vanilla-producing province of Sava.
The harvest of green vanilla beans runs between July and September, and curing the beans takes another three months.
(Writing by Richard Lough; Editing by Jack Kimball and Keiron Henderson)
