Is there any future for cash crops in developing countries? The case of vanilla.

Abstract

A generally used term for easy marketable commodities usually with high prices is cash crops As a result of it these commodities are produced by many developing and especially least developed countries (LDC). These crops have witnessed fluctuation in prices during the last decade. We can suppose that these products would be the domain of developing countries nevertheless the opposite is true. Vanilla is a very good example of those products especially because just very few producers exist. We can suppose that vanilla trade would be the sphere of very few producers and beside that the agents would deal mostly with the demand site on the international market. However, the international vanilla market shows slight differences. Nevertheless, it can be grown just in very few areas. Madagascar belongs between the most well known producers. The aim of this paper is to analyse the international vanilla trade with regards to the production and consumption side and specifics of cash crops in general. International vanilla trade is even higher than the production itself. These results indicate that vanilla is being re-exported and the trade is not just a normal commodity trade but being use as a investment instrument as well.