Despite the bleak future of higher import tariffs, organic vanilla producers from Lombok are confident that their products will maintain strong foothold in the US market.
The highly prized commodity, grown in labor-intensive production setting amidst erratic weather challenges, will continue to be in high demand irregardless of high tariffs.
In April, US has delayed a 32% import tariffs on Indonesia goods for 90 days, and once this will take effect in July, the hardest hit will be producers of raw agricultural commodities such as organic vanilla, a key export for farmers in West Nusa Tenggara.
Despite the challenges, organic vanilla producers are optimistic that US buyers will continue to demand for their products, as growing vanilla is not as simple as growing other crops, not to mention it is labor-intensive.
Vanilla cultivation is climate-sensitive and unsuitable for most US regions, which makes exporters from Indonesia, Papua New Guinea and Madagascar vital to the global supply chain, especially for organic-certified varieties. Unlike electronic or textile goods that can be locally produced, vanilla remains nearly irreplaceable.
According to an industry spokesperson, US buyers are commited to purchase its entire harvest despite the increased costs. Nevertheless, vanilla producers are still exploring the potential of exporting to other regions so as to reduce their reliance on the US market.
Indonesia is the world’s 2nd largest producer of vanilla after Madagascar. Despite being a major producer, Indonesia only ranks 7thin global vanilla exports, contributing around 2.63% to total global trade. In 2022, the top five export destinations for Indonesian vanilla were the US (64.9%), Germany (8.6%), the Netherlands (7.5%), Singapore (2.6%), and Canada (2.5%).
