THE BUYER’S MARKET
• December 2025 •
Political and Economic Context in Madagascar
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Major Policy Changes Affecting the Vanilla Sector
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Current Export Behavior and Market Dynamics
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Madagascar Crop Outlook
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Global Market Overview
Political and Economic Context in Madagascar
Madagascar has undergone significant socio-political changes in recent months. Widespread youth-led protests by a disenchanted Generation Z movement resulted in the departure of both the President and the country’s most influential business executive. A transitional, military-led government is now in place.
Despite the political turbulence, the situation in Antananarivo and throughout the primary vanilla-producing regions is currently calm. A renewed sense of optimism is noticeable on the ground, and we hope this period of stability endures.
Major Policy Changes Affecting the Vanilla Sector
Abolition of the Export Tax and Disbanding of the CNV
Two major supply side policy decisions have reshaped the vanilla industry:
- The USD 4.00/kg export tax has been eliminated.
- The CNV (Conseil National de la Vanille) has been dissolved. The CNV’s purpose was never entirely transparent beyond administering the export tax.
The removal of these constraints has leveled the playing field and enabled broader participation among exporters. The government is still deciding on the new minimum export price, which exporters must declare to customs. Historically, this minimum price determined the amount of foreign currency that exporters were required to repatriate within 90 days. Often, the minimum price exceeded actual market prices, forcing exporters to purchase additional foreign currency to comply—an arrangement that favored larger, well-capitalized exporters.
When the new minimum export price is introduced, it is crucial that it reflects real market conditions rather than an inflated benchmark.
Removal of U.S. Tariffs on Vanilla Imports
A second major development is the elimination of U.S. tariffs on vanilla imports from all producing regions—including Madagascar, Uganda, Indonesia, and Papua New Guinea. The rationale for imposing tariffs on a crop that cannot be commercially grown in the U.S. was never clear. Importers were forced to absorb an unnecessary 10–19% premium during that period. We hope this policy change remains in place.
Current Export Behavior and Market Dynamics
As of this writing, export volumes of the 2025 crop remain limited. Exporters are cautious as they assess the impact of these sweeping policy changes.
Once confidence is restored, we expect a sharp increase in exports as international buyers capitalize on exceptionally low prices. Local speculation has already begun. Prices initially reached their lowest levels in two decades but have risen slightly since market opening. Given the limited downside risk, many local actors are expected to continue stockpiling.
Some exporters still hold substantial inventories from previous seasons purchased at much higher prices. Their strategies: averaging down costs, liquidating stock, or waiting for a stronger rebound, remain uncertain.
Madagascar Crop Outlook
2025 Crop Forecast
The 2025 Madagascar crop will be abundant, mirroring 2024 production. Although it is still early for precise estimates, the crop is expected to total 2,500–3,500 metric tons. Due to the maturity of the crop, split beans may account for as much as 60%. High pollination rates will also result in a higher proportion of shorter beans and cuts.
Overall quality should be very good, provided exporters maintain rigorous curing and preparation standards. These standards are especially critical for black (gourmet) vanilla. With prices at historic lows, some exporters may be tempted to reduce preparation costs, risking quality consistency.
Quality and Timing of Black (Gourmet) Vanilla
Gourmet vanilla requires significantly more time and expertise to prepare. For the 2025 crop, true black vanilla should not be expected before January 2026 at the earliest. Anything earlier is likely to be overly humid and unstable, despite good appearance.
Vacuum packing is frequently—and at times improperly—used to maintain artificial humidity and appearance for beans that would otherwise classify as industrial grade. The number of genuine gourmet-grade preparers in Madagascar continues to decline. Buyers should exercise serious caution, as unstable black vanilla often develops significant mold weeks or months after delivery, posing financial and reputational risks, especially at the retail level.
2026 Crop Outlook
Flowering for the 2026 crop has begun, and early indications suggest another above-average harvest. However, meaningful estimates cannot be made until after the cyclone season, typically ending in April.
Vanilla production now spans a large geographic area from the northern regions down past Tamatave and increasingly inland. This geographic diversification reduces the risk of a single cyclone significantly damaging the national crop.
Global Market Overview
Madagascar: An Exceptional Buying Opportunity
We believe the current moment represents the strongest buying opportunity for industrial-grade vanilla in more than 20 years. Prices are near or at historical lows—arguably record lows when adjusted for inflation. Downside risk is minimal, while the long-term upside potential is substantial.
Under proper storage conditions, high-quality Madagascar vanilla beans can remain stable for several years, despite our standard stated shelf life of 3–6 months (which reflects uncertainty in customer storage conditions). We encourage buyers to consider coverage extending into 2027, subject to supplier availability.
Uganda
Uganda likely produced 400+ metric tons in 2025. Ugandan exporters recognize the need to remain competitive with Madagascar if they hope to maintain or increase market share.
Indonesia and Papua New Guinea
Indonesian and Papua New Guinea vanilla continues to command higher prices due to their distinct flavor profiles. We do not expect significant softening from these origins.
Indonesia is facing increased scrutiny after trace amounts of Cesium-137 were recently detected in unrelated agricultural exports (cloves and shrimp). As a result, the U.S. FDA has imposed more stringent testing requirements, creating a temporary bottleneck for Indonesian vanilla entering the U.S. market. We believe these incidents are isolated and expect the situation to improve in the medium term.
Conclusion
If Madagascar vanilla prices have not yet reached the absolute bottom, it is very close. Current price levels for Madagascar industrial-grade beans are exceptionally attractive, presenting a rare opportunity for buyers. Combined with the excellent quality of the 2024 and 2025 crops, the current market is a generational opportunity. The risk-reward profile overwhelmingly favors aggressive buyers.
It remains uncertain how long the market will remain at this confluence of optimal conditions. Madagascar and the United States have both eliminated their tariff and tax barriers; while quality, quantity and price are at historically advantageous levels.
Aust & Hachmann (Canada) Ltd
The market reports that we issue are based strictly on our opinions and observations. We believe we have presented a reasonably accurate portrayal of the global vanilla market in very general terms. The reports date back almost 20 years and are all available on our web site:
https://www.austhachcanada.com/reports/
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