Weather fluctuations have significant impact on vanilla farming. Cyclones, droughts, or extreme rainfall result in lower yields and a decrease in supply, raising vanilla prices. In addition, pests and crop diseases represent serious risks to the production of vanilla since outbreaks can destroy crops and further reduce availability.
The demand from the food, beverage, fragrance, and cosmetics industries around the world is crucial as well. Also, changes in customer preferences or rising demand from new regions will add price volatility.
On top of that, the instability of vanilla prices is further influenced by market speculation, currency exchange rates, government regulations in the producing countries, crop management techniques, availability and cost of substitutes, and concerns about sustainability and the environment.
According to projections, the vanilla market industry will expand at a compound annual growth rate (CAGR) of 4.70% from USD 1.46 billion in 2024 to USD 2.02 billion by 2030. Hence, the approximate wholesale price range for vanilla will be from $29.02 to $46.96 per kilogram in 2030.