(Bloomberg) -- Madagascar, the world’s biggest producer of vanilla, said revenue from exports of the pod slumped 64% due to competition from Asia and the impact of price liberalization.
Revenue plummeted to $52.9 million for the three months through March from $144.9 million a year earlier. While shipments almost doubled to 1,125 metric tons during the quarter under review, the price contracted by 81% to $47.1 per kilogram.
“On the world market, Malagasy vanilla faced stiff competition from Indonesia, India and Uganda,” Madagascar’s central bank said in a report dated Aug. 20. “On the local front, the sector has to cope with stock accumulation and the liberalization decided in April 2023.”
The Malagasy government dropped its minimum export price policy that it had in place since 2020 after three years, according to Le Monde. That lowered the amount producers get for their pods.
Also a producer of nickel, the Indian Ocean island nation witnessed a sharp drop in sales during the quarter. Exports of the metal generated $94 million, down by nearly two thirds. Orders fell to 5,745 tons from 9,320 tons, while the average price declined 42%.
The decline is due to a glut caused by the emergence of a new generation of batteries based on lithium and indium, the central bank said.
Overall, despite a lower import bill, the trade gap widened to $291.2 million for the quarter, from $157.3 million a year ago.
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