Trump's trade war shakes Madagascar, the vanilla island
Fulgence, a vanilla farmer, has never tried vanilla ice cream. “I once smoked a cigarette with vanilla,” he says, laughing. “It didn’t taste good. A bit bland.” With his wife, Georgette, Fulgence runs his fingers through a mound of dark brown, intensely fragrant vanilla pods drying on a tarp next to their home in the village of Andasimahay, in northeastern Madagascar. “What I think doesn’t matter,” he says, shrugging. “What matters is that we can sell the pods for a good price.”
Madagascar is the world's leading supplier of vanilla. No less than 80% of all production comes from this vast island in the Indian Ocean. The center of the vanilla industry is in Sava, the northeastern region where Andasimahay is located. Three-quarters of all this vanilla is exported to the United States.
Fulgence and Georgette's pods could easily end up in the hands of an American company. Fulgence doesn't care where his vanilla ends up, he says. The farmer seems seemingly unaware of the dark clouds that have been gathering over the Madagascar vanilla sector since Donald Trump launched his trade war with the world .
On April 2, the US president raised trade tariffs on more than 60 countries and the European Union in what he called " Liberation Day ." He decided to assign Madagascar the second-highest tariff on the African continent, a staggering 47%. Finally, on August 1, Trump announced a new tariff schedule in which most countries saw their tariffs reduced from those initially announced. Among them was Madagascar, whose tariffs were reduced from 47% to 15%. The consummation of this new tariff order will take effect on August 7.
With these tariffs, Trump wanted to correct the "unfair" trade balance with other countries. States that export more products to the United States than they import could count on "reciprocal" import tariffs. This was the case with Madagascar, which last year exported $733.2 million worth of products to the United States but imported "only" $53.4 million worth of American products. Like Madagascar, there are many poor countries on the continent that export to the United States but, due to their lack of purchasing power, import less than they export.
The consequences are already disastrous for the already precarious economies of African countries, despite the fact that the tariffs on countries like Lesotho and Madagascar are lower than initially announced. The uncertainty surrounding this trade earthquake has already caused enormous damage to the island's vanilla sector. In April, the day after Trump's announcement, the impending tariff caused a genuine panic in Sambava, known as the "vanilla capital of Madagascar," located two hours south and 14,500 kilometers as the crow flies from Washington, DC.
“American buyers were afraid the price would rise because of Trump’s statements,” explains broker Randel Kenny, “so they bought large quantities for a while.” Then everything came to a standstill. The money Kenny earned in April only lasted a few weeks. “Well-packaged vanilla can be stored for years,” says Kenny, distressed. “American companies that really need vanilla have stockpiled their stocks, so we’re hardly selling any anymore.”
American companies that really need vanilla have stockpiled their inventory, so we're selling almost nothing anymore.
Randel Kenny, intermediary
Every now and then, a motorcycle loaded with a plastic bag full of pods arrives on Kenny's scale, but there's not much movement. "Trump is selfish," he concludes, slumped on a wooden bench. "Look at how we live here," he says, pointing to his companions in the cabin they've built themselves. Five boys, all Kenny's age, sitting idly on wooden benches because they don't have jobs. "While Americans keep getting richer," Kenny snorts, "they're preventing us from escaping poverty."
Yockno Razafindramora, a vanilla trader, explains that these past few months have been tough for vanilla exporters. “Especially right after the 47% trade tariff was announced, we saw orders from the US come to a complete halt. That put exporters in a difficult situation because they no longer had any cash flow. They were worried about their future,” he summarizes.
Razafindramora also mentions that, despite the new tariffs being much lower, they still see many American buyers not purchasing vanilla, as they stockpiled during these months of uncertainty. Furthermore, the price of vanilla is at an all-time low, and adds that, due to the tension caused in April by the announcement of these exorbitant tariffs, "many farmers picked their vanilla pods early." "This means the quality is lower compared to fully ripened pods; they should have waited longer before harvesting. In short, we still have a large surplus of vanilla, with varying quality. So we're not out of the woods yet," the trader concludes.
The Mayans discovered this spice long before Americans began cooking with vanilla, in the 14th century. The Spanish brought vanilla from Mexico to Europe, where it became a luxury item. However, the yellowish-white vanilla orchid could only be pollinated by a very rare species of bee, which lives only in Central America, so it was impossible for the plant to grow in Europe.
In 1841, Edmond Albius discovered on the island of Réunion (located in the Indian Ocean) that vanilla orchids could also be pollinated by hand. Albius's discovery, a 12-year-old slave farmer, led to the plant's cultivation, which flourished particularly well in the neighboring French colony of Madagascar.
However, the tropical climbing orchid remains very difficult to cultivate. “Pollination is particularly complicated,” explains Didier Peter, a 75-year-old vanilla farmer with a huge smile. “Vanilla flowers open for only a few hours, one day a year,” he explains. “If pollination is delayed, the beans will never germinate.” This patch of jungle, next to the road from Ambatomenavava to Sambava, is his “farm.”
For nine months, the finger-thick vanilla pods grow on green vines that Peter carefully entwines around small trees. This farmer, like the other 70,000 vanilla farmers in Sava, practices “agroforestry”: on a forested hillside, meter-high fig and rosewood trees provide much-needed shade for his “fussy” vanilla vines. “They have to get just the right amount of sun, shade, humidity, and water,” he explains, “so they don’t die.”
The difficult growing conditions make vanilla a spice with a strong character. Farmers have not yet managed to mechanize planting, pollination, cultivation, and drying operations. To make matters worse, Madagascar has suffered several cyclones in recent years, which are becoming increasingly violent due to climate change . In 2017, Cyclone Enawo destroyed at least 30% of the island's total vanilla crop.
The devastating cyclone also caused the price of vanilla to skyrocket. In 2018, a kilo of vanilla cost $600 (€514). “It was a golden age for Sava,” recalls farmer Peter. “If I had grown vanilla back then, I could have built a brick house.” In the commercial hub of Sambava, “vanilla villages” were even built thanks to the exorbitant prices.
In recent years, however, the price has plummeted. In Sambava, today, the price per kilo of A-grade pods is only $50 (€42). One of the key reasons is that vanilla producers have reinvested part of their enormous profits in new plantations. “The flowers that were planted back then are starting to produce quality pods now,” says a vanilla exporter who prefers to remain anonymous. He explains that vanilla orchids don't begin producing usable pods until three or four years after planting. “That's why we now have a huge surplus.”
The difficult growing conditions make vanilla a spice with a strong character. Farmers have not yet managed to mechanize the planting, pollination, cultivation, and drying operations.
The exporter opens the doors of his warehouse in Tsarabaria, about 100 kilometers northwest of Sambava. There are “tens of thousands of pods” packed in boxes and ready to be shipped. An American flag and the Statue of Liberty are painted on one wall; the exporter typically works exclusively with American companies in the flavoring industry—such as Virginia Dare—who process their vanilla into a high-quality extract and sell it to major multinationals such as Nestlé, Unilever, and Mars.
The exporter bought the four giant SUVs parked next to the warehouse with the money he earned during the "vanilla heyday." Business was still going well, but the exporter has realized, like the middleman Kenny, that the Americans are now waiting to see what happens. "We haven't had any orders for at least a month," he murmurs as he runs his hand over the packed surplus. "I can hold out for a few more weeks, but then I might have to sell one of the cars or my house. Like many other exporters, we're on the verge of bankruptcy."
In Antananarivo, Madagascar's capital, a three-day drive south of Sambava, there is also great concern. "Vanilla is the country's most important export after nickel," explains economist Fenozo Razafindrasoava on the sunny terrace of a French café. In addition to jobs in the vanilla and raw materials sectors, Trump's measures also jeopardize 60,000 jobs in Madagascar's textile industry.
The collapse will hit the most vulnerable vanilla growers hardest. Some farmers have formed cooperatives in recent years to force vanilla product manufacturers to pay them better prices. “But most growers work in isolation and live in remote areas,” says Razafindrasoava. “They are the backbone of the sector, yet the government provides them with no safety net.”
Malagasy exporters want to export vanilla to European and Asian countries and allow companies based in those countries to produce vanilla extract from the pods. “If they export the enriched product to the US, the Americans will be shooting themselves in the foot,” Razafindrasoava says, shaking his head. “The intermediary countries will benefit the most. And that goes against Trump’s America First policy.”
For exporter Rosemine Taheraly of Spice Aroma, her biggest fear is that American companies will replace natural vanilla with synthetic vanilla. According to a recent article in The Washington Post , around 90% of the vanilla flavoring consumed in the United States is already artificial.
Price and supply fluctuations have led American wholesale vanilla consumers to invest heavily in the development of synthetic vanilla in recent decades. “So they can mix natural vanilla with imitation vanilla,” says Taheraly. In his opinion, it’s a “shame” that the flavor of his vanilla beans, hand-selected and dried by five employees tableside, is diluted in this way.
Taheraly closely follows current events in the United States. “Every day there's news about Trump's trade tariffs,” he sighs. “The uncertainty has already hurt the vanilla industry, which was already volatile.” Taheraly sits up in his chair and recovers. “Vanilla can become a luxury product,” he says after a brief pause. “Five years ago, even though vanilla was more expensive than silver, there were Americans who bought it. There will always be people who prefer real vanilla to fake.”
EL PAÍS
