Australian Financial Review May 11, 2002

Vanilla worth a bean or two in East Timor

Tim Dodd in DiliI

Commodity markets are doing no favours for East Timor, which becomes an independent nation next weekend, with prices for coffee, its most valued agricultural product, languishing in the doldrums.

However, the answer may be as simple as plain vanilla, a product which grows in the same cool, tropical highlands as coffee but can sell for 200 times as much.

While coffee prices are well below historic levels, the price of vanilla has shot up because of storms in 2000 and 2001 which destroyed the crop in Madagascar, the world's largest producer.

All this spells opportunity for the world's newest nation, and at a warehouse 10 kilometres west of Dili, workers are already processing the early crop from this year's vanilla harvest.

It is a pilot project run by Café Timor, a farmer's coffee co-operative formed with United States aid, and this year's tiny two-tonne crop is conservatively worth $US100,000 ($184,000). But there is a downside. If the intricate processing of the vanilla pods is not done carefully, the result is not worth a bean.

"It's a very delicate process and everything must be very clean," said Lucio Marcel Gomez, Café Timor's manager of business diversification.

For the work team it is a far cry from processing coffee beans, which are more forgiving of error.

Processing vanilla is labour intensive, and so is growing it, which brings another economic benefit to job-scarce East Timor.

Unlike coffee, which grows wild in the mountainous interior, vanilla vines need watering, tilling and composting.

For thousands of poverty-stricken coffee farmers, however, vanilla will not be a quick fix. For most of them the capital cost of switching crops is unaffordable.

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