After Chocolate Hit, Vanilla Supplies Now Set To Face Disruption

Vanilla bean pods.

(Bloomberg) -- Sweet-toothed consumers are facing double trouble with storms lashing the world's top producer of vanilla – a beloved flavor for ice cream – even as surging cocoa prices bite into chocolate.

Madagascar's key vanilla-growing region has been slammed by Cyclone Gamane, whose rain and high winds have flooded fields and stripped vanilla pods from their vines.

Georges Geeraerts, president of the Indian Ocean island's union of vanilla exporters, said the deluge could halve the vanilla harvest.

“On a bad year, production is about 1,500 tons compared with a range of 2,000 to 2,500 tons,” Geeraerts said via telephone. “A conservative estimate, ahead of more detailed analysis from the growing region, means that the output for the current harvest could be as low as 1,000 tons.”

Adverse weather is hammering Africa, with drought conditions in the south withering crops and contributing to higher food inflation, while West Africa's cocoa producers have seen yields collapse from heavy rain and disease, more than tripling prices to as much as $10,000 a ton.

That's forcing chocolate makers to raise prices and trim portions for customers. The good news for ice cream lovers is that vanilla's supply constraints are not expected to be prolonged, and its cost has still not recovered from a recent glut in supply.

“This year's lower impact will bring equilibrium as from 2025,” said Geeraerts. “The market is liberalized and the current pricing per kilogram is about $60” from $250 two years ago.

More stories like this are available on bloomberg.com