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Plainly high-priced: vanilla

Priced vanilla at the supermarket lately? One 4-ounce jar of extract, $9.15 to $17.99. One bean, $11.69.

Some brands are selling vanilla in a puny 1-ounce size to reduce the sticker shock (down to $3.89). And everybody agrees prices are headed higher.

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What's going on? Just four years ago, prices were falling, after the breakup of the cartel that had controlled Madagascar's vanilla production.

The trouble started April 3, 2000, when Cyclone Hudah, a Category 4 storm with 140-mph winds, plowed through Madagascar's vanilla-growing region. About 15 percent of the world's vanilla crop was destroyed.

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"That's what has caused the problems over the last two or three years," says Craig Nielsen, vice president of Nielsen-Massey Vanillas Inc., a Waukegan, Ill.-based importer.

"It was expected that prices would start to drop back down this year," Nielsen says. "But last year, because of bad weather during the flowering season, only 20 percent of the vines flowered. Instead of its usual 1,200 to 1,300 tons, Madagascar will produce only 300 to 600 this year."

Because Madagascar is the source of almost three-quarters of the world's vanilla, the upshot is that the supply of vanilla on the market next year could fall by 50 percent or more.

"The market is anticipating this," Nielsen says.


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