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Floor Price for Vanilla Exports Removed in Madagascar

In Madagascar, an inter-ministerial decree (Ministry of Economy and Finance and Ministry of Industry, Trade and Consumption) dated May 5, 2023, announces the removal of the floor price of $250 per kilo of vanilla exports for the current season (2022-2023).This decision by the Malagasy government, which could seem to give a second wind to vanilla producers, raises important questions.

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What about the floor price of green vanilla?

The decree does not say anything about this price, which seems to remain unchanged at 75,000 Ariary per kilogram. Consequently, we can expect that the profit margin of many operators will be subject to downward pressure. Indeed, these operators could engage in a price war to liquidate their stocks. International buyers are well aware of this, which explains their rather cautious and wait-and-see attitude ten days after the liberalization of the floor price of vanilla for export.

Any changes regarding the export license in Madagascar?

The government's decision of May 5 does not bring any change with regard to the granting of vanilla export licenses, which is still required in Madagascar to trade with international buyers.

It is obvious that the executive order only partially liberalizes the vanilla market in Madagascar.

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