Global glut triggers slump in vanilla prices even as demand remains stagnant
Vanilla prices have crashed following a glut in supply in the global market. The prices are reportedly hovering in the range of $60-70 per kg, a steep decline from the peak of $600 during 2016-2021. In India, the vanilla prices are currently ranging between ₹600-700 per kg, against a record of ₹5,000 kg during 2016-21, a trend which had sustained for few years.
Joseph Sebastian, managing director, EcoSpice, a vanilla processing company in Idukki, said supply from Madagascar — the world’s largest producer — has reached record-high levels, causing green vanilla prices to drop to historic lows. Coupled with this, the political turmoil in the country has disrupted normal export flow and dampened the market activity, he said.
Despite supply chain disturbances, Sebastian said global demand remains insufficient to absorb the excess volume, resulting in persistent downward pressure on prices. The global vanilla market continues to face significant pressure, firmly positioned in a buyer-driven cycle. Farmers across major producing regions are enduring challenging conditions driven by oversupply and weakened demand.
It was because of higher prices the farmers took up vanilla farming in a big way across producing countries. This resulted in increased supply, he said.
Indonesia is yet to fully align with the global supply-demand reality and continues accumulating inventory, adding further weight to an already saturated market.
Uganda remains closely aligned with global market dynamics and maintain comparatively low inventory levels. However, due to consistently weak farm-gate prices, farmers are rapidly transitioning to more profitable crops such as coffee and cocoa, which may influence Uganda’s future vanilla availability.
India, according to Sebastian, continues to play a minor role, producing around 15-20 tonnes annually, primarily serving domestic consumption. Moreover, most confectionery companies have huge inventory as they procure considerable quantities at lower cost. Vanilla is a flavouring ingredient in many food items.
Overall, the market outlook remains bearish in the short to medium term, with an imbalance between production and demand driving a challenging environment for origin stakeholders, he added.
Published on November 13, 2025
