Vanilla, the spice produced from a tropical climbing orchid, used for cooking, has been grown in Uganda before, but its commercial success was short-lived, in fact interrupted by the Idi Amin regime (1971-78). Today, Uganda is enjoying a vanilla boom and processors and exporters can expect anything from US$80 per kg to US$200 per kg (depending on quality and order quantity). Prices to the grower, although significantly less, have also increased--between $17 and $25.
The rise of vanilla prices on the world market in the last two years is a result of a 10% decline in production from Madagascar and Indonesia, two of the world's largest producers. Madagascar, the world's No.1 producer (followed by Indonesia), exports over 1,000 metric tonnes of the spice every season. Indonesia, on the other hand, exports about 600-750 tonnes and Uganda 100 tonnes.
But cyclone Hudda, which devastated Madagascar's vanilla-growing region three years ago, destroyed over 20% of its crop and caused prices to skyrocket. Because the orchids take three years to flower, this has resulted in a shortage on the world market and an escalation in price, from $15-$300 per kilo in September 2003 to $400 in November 2003.
The popularity of vanilla farming in Uganda is a result of declining coffee prices on the world market. In fact, thousands of peasant farmers in Uganda have abandoned coffee growing in favour of vanilla. An estimated 100,000 peasants nationwide now grow vanilla. Another 60,000 are expected to join the ranks by March 2004.
The annual global demand for vanilla is estimated at 2,500 to 3,000 metric tonnes. Among the major buyers are France and Germany. But the US is the world's biggest buyer. In recent years, there has been a higher demand by American soft drink manufacturers, such as Coca-Cola, who have started flavouring their beverages with vanilla.
Since America requires huge amounts of the spice, it is not surprising that the United States International Development Agency (USAID) has been actively promoting the growing of vanilla in Uganda with "a plant more …