Antananarivo — Madagascar’s vanilla producers expect prices to remain high during the 2018-2019 season but they will not match the record levels the luxury spice reached in 2017.

Nearly halfway through the harvest of green vanilla beans that runs from July to September, prices have reached $56/kg, 20% higher than prices at the start of the harvesting season on July 15. Once the vanilla is ready for export its price is eight to 10 times higher than for green vanilla, meaning the export price is expected to be $376-$560/kg.

The forests of the northeast tip of the Indian Ocean island are the world’s vanilla capital due to the perfect climate. Vanilla from Madagascar is known for its rich and creamy taste.

In 2017, the price of black nonsplit Madagascar vanilla VAN-MG-BNS, the benchmark price, rose to a record $635/kg from $100/kg two years earlier.

The surge in prices, sparked by growing luxury market demand for natural — as opposed to synthetic — vanilla, caused a wave of thefts of vanilla pods by illicit vanilla hunters. Police and vigilante groups have taken to guarding the valuable beans to ward off thieves.

Even though prices remain high in 2018, and there has been a lack of prefinancing from international buyers, green vanilla has attracted demand.

"Many local buyers have earned enough money in recent years and could buy green vanilla at these prices without waiting for funding," Ialy Raharijaona, secretary-general of a buyers group in the Sava region in the northern part of the island, said.

Many exporters said at the beginning of the green vanilla buying season that they had not yet received prefinancing from their international buyers.

In 2017, when the thieves were active, farmers harvested the green vanilla pods early rather than risk having them stolen. This meant immature vanilla came on to the market, which reduced the quality of Madagascar vanilla, buyers said. The quantity exported also fell.

Some containers were returned by international buyers during the 2017-2018 season because of the poor quality, a senior industry source in Madagascar told Reuters on condition of anonymity.