Vanilla plant originated from Mexico comprises 110 known species of which the most commercially viable is known as Vanilla Planifolia. Vanilla has been widely grown in many countries including Mexico, Madagascar, Indonesia, Comoro, Uganda, India and Tahiti. It has many uses, including aromatizing perfumes, cigars and liqueurs. Europeans prefer to uvanilla planifoliase the beans, while North Americans usually use the extract. 
Onculinary uses, vanilla’s mellow fragrance enhances a variety of sweet dishes; puddings, cakes, custards, creams, soufflés and, of course, ice cream. Vanilla flavour is detectable in many chocolate and confectionery items and several liqueurs such as Crème de Cacao and Galliano. Market and Trends Nearly three-quarters of the world Vanilla producer is held by Madagascar followed by Indonesia and Comoros with 21% and 9% respectively. World production was about 4,500 tons in 2004 and has increased strongly in recent years. Table below depicts the world top producer of Vanilla.
The international market demand predominantly controlled by the USA, the European Union and Japan. In 2004 the three countries block made up 4,000 tons of world import. The USA has the share of two-third world import, the European Union takes 30% and Japan 6%. Stimulated by demand in the Food and Beverage industry contributes to bigger demand for Vanilla.
| VANILLA -MARKET SHARE | |
| Madagascar | 63% |
| Indonesia | 21% |
| Comoros | 9% |
| Uganda | 3% |
| India | 1% |
| Jamaica | 1% |
| Papua New Guinea | 1% |
| Others | 1% |
Two sectors account for a large proportion of world supplies; ice cream and beverages. Recent introduction of Vanilla Coke by Coca-Cola has put the entire industry on the alert.
Vanilla Coke, which contains natural vanilla immediately give Vanilla industry an impact on natural Vanilla’s requirements. Sources quoted that Coca-Cola would use about 200 tons of vanilla per year. Assuming a 10% increase in its vanilla purchases if the product is successful and imitation by competitors (such as Pepsi and Virgin) world demand could increase by 200 to 400 tons per annum.
| VANILLA BEAN - WORLD PRICE per KG | |
| 1998 | US$19.26 |
| 1999 | US$20.16 |
| 2000 | US$33.55 |
| 2001 | US$86.03 |
| 2002 | US$145.45 |
| 2003 | US$156.13 |
| 2004 | US$400.00 |
After the production cartel that controlled prices of vanilla was dismantled in 1995, prices initially fell, but from 2001 onwards a strong increase was witnessed, due to shortage in production, ending in a true vanilla boom in 2002, 2003 and 2004. By the end of 2003 prices for vanilla beans had reached US$180 per kg (FOB), up from US$20 in 1999. In December 2004, a spot price of US$380 is quoted. Future contracts are now being established (shipment 2005), for prices of US$150 to US$250 (mixed quality). The price is expected to remain buoyed despite the emergence of new country producers like India and Uganda.
Natural Versus Synthetic
Synthetic vanilla is widely used and competition on market has become fierce when the price of natural vanilla rockets. The consumption of synthetic vanilla totals 12,000 to 15,000 tons per annum whereas world trade in natural vanilla is only 4,500 tons. It is reported that 97% of world consumption of vanilla is synthetic and 88% of the USA vanilla consumption is synthetic. The price ratio between natural and synthetic vanilla on average is 1:10
Higher worldwide demand for vanilla is primarily purchased by food manufacturers with supply falls short of demand, results in many food companies substituting natural vanilla with artificial flavoring (synthetic). There is a clear difference between the two products. Natural vanilla does not consist vanillin alone but contains several tens of aromatic compounds that give it all its value in comparison to synthetic vanilla which only comprise vanillin aroma.
