A Decrease in Demand along with an Increase in Supply

UN Office for the Coordination of Humanitarian Affairs 2006, Integrated Regional Information Network (IRIN), Economist Intelligence Unit (EIU)

Poor World Vanilla Prices Hurt Comoros

"Vanilla prices dropped from over US $300 per kilogram in 2003 to less than $50 in 2005."

Users of vanilla have been turning to lower-cost, (lower quality?), synthetic vanilla which is less like to be affected by natural disasters.

Now back in 2000, production was down due to bad weather in the Indian Ocean.

Additionally, production of natural vanilla from other countries is rising according to the Food and Agriculture Organization of The United Nations.

Originally from Mexico, Central America, and the Caribbean, the orchid that produces the vanilla bean is grown in tropical countries around the world. Leading producers include Madagascar and Indonesia.

As a consumer do you care where your vanilla comes from?

The demand curve that the producers on the island of Comoros face is infinitely elastic at the world price.

Comoros is an island nation that is dependent on the prices it receives for the commoditities it produces.