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Market Newsletter: Flavor and Fragrance Ingredients

April 2005


Of continuing concern to our industry is the European Union's draft legislation on the “registration, evaluation and authorization of chemicals”
(REACH ), which may be implemented in 2007. While the pending legislation is being studied by the European Parliament's Committee on the Environment, Public Health and Safety, with a final decision on altering some REACH facets expected this fall, various industry associations continue working to have ESSENTIAL OILS and NATURALS excluded from REACH .

International Maritime Organization ( IMO ) as well as International Air Transport Association ( IATA ) regulations require shipments of essential oils and aromatic chemicals listed as “hazardous cargo” to be clearly identified and declared as such. With sea and air cargo being ever more scrutinized, especially by U.S. authorities, we urge all our industry friends to comply with such regulations – to avoid potential problems upon arrival of their shipments at USA entry points.

For U. S. customs entry purposes, sea and air freight charges are now required to be shown on respective Bills of Lading.

As previously indicated, knowledgeable Florida sources anticipated the Florida Agricultural Statistical Service to further reduce this season's Florida ORANGE crop numbers. This was borne out by the April 8, 2005 forecast, reducing the crop figures for Early, Midseason and Navel ORANGES by another 1.5 million boxes – to 79,200,000 boxes. While the forecast for VALENCIA ORANGES , now being harvested, did not change, traditional Florida shippers foresee that respective crop figures might also be reduced in the next forecast, to be released May 12, 2005 . The current forecast shows this season's Florida ORANGE crop (all varieties) amounting to 151,200,000 versus 242,000,000 boxes for the 2003/2004 season.

While the forecast for Florida GRAPEFRUIT remains unchanged at this time – at 13 million boxes, it was adjusted showing the WHITE GRAPEFRUIT crop increased to 3,500,000, the COLORED GRAPEFRUIT crop reduced to 9,500,000 boxes.

With the available synthetic substitutes priced more competitively that natural GRAPEFRUIT OIL many buyers have been resisting current pricing of the latter. Based on this season's crop figures, the market for MIDSEASON and VALENCIA ORANGE OIL , as well as for D'LIMONENE (CITRUS TERPENES) continues firming.

Limited quantities of OIL CITRONELLA have been on offer at USD4.50 per kilo CFR world ports. Similar to the Florida situation, based on the current high prices, demand for Argentine GRAPEFRUIT OIL has slowed. The new crop LEMON harvest has started. Experiencing strong demand, traditional processors' prices are firm. Active demand for GREEN/RED MANDARIN OIL and VALENCIA ORANGE OIL is keeping prices firm.

BALSAM COPAIBA and OIL COPAIBA have remained freely available, at competitive prices but OIL BOIS DE ROSE (ROSEWOOD OIL) continues to be a problem. Traditional supplier advise that not only actual shipments, but even samples, must be cleared/authorized by IBAMA (Instituto Brasileiro de Meio Ambiente), the Brazilian Environmental Institute. This has resulted in substantial delays for samples and actual shipments in recent weeks. Meanwhile, the price of this oil continues to advance, to above USD75.00 per kilo FOB, for the limited quantities available. No changes have been observed pertaining to CITRUS OILS and respective by-products. To date we are without offers for new crop ORANGE OIL and/or CITRUS TERPENES (D'LIMONENE) from any of the traditional, major processors. Limited quantities of various certified ORGANIC ESSENTIAL OILS (LEMON and MANDARIN OIL , e. g.) are currently available for prompt and / or delayed shipment. OIL EUCALYPTUS CITRIODORA prices have firmed in recent days, currently quoted as high as USD6.75 per kilo CFR world ports in minimum 5 tons lots per Bill of Lading.

New crop, spring CASSIA OIL will be available within the next few weeks, with several shippers advising that the crop may be shorter than last year and that prices may advance. Due to lacking demand, CITRONELLA OIL prices remained unchanged during April, although higher than those of Indonesian oil. Substantial tonnage of OIL CLARY SAGE has remained unsold and, depending on quantity, is priced at USD20.00 per kilo CIF world ports and lower. As with other AROMATIC CHEMICALS , based on petroleum derived feedstocks, COUMARIN prices continue to advance. Latest offers have been priced as high as USD9.00 per kilo CIF world ports. Small lots of EUCALYPTUS CITRIODORA OIL have become available at USD8.40 per kilo CIF. OIL EUCALYPTUS GLOBULUS prices receded slightly in recent days, to USD5.35 to 5.45 per kilo CIF, depending on quantity and supplier. EUCALYPTOL is presently priced at USD7.40 to 7.50 per kilo CIF, depending on quantity. GARLIC AND GINGER OIL supplies remain short and prices continue to advance. New crop distillation of OIL GERANIUM has commenced with prime quality oil priced around USD43.00 per kilo CIF. The market for OIL LITSEA CUBEBA and its derivative, CITRAL , remained unchanged during April. In past weeks the price of MENTHOL BP/USP receded slightly, to around USD13.80 per kilo CIF – based on lower Indian Melted Menthol feedstock prices, while pricing of PEPPERMINT OIL 50% remained unchanged. Pricing and availability of OIL SASSAFRAS, OIL SPEARMINT, STARANISEED OIL, TANGERINE OIL and VETIVER OIL remained unchanged in April.

Small quantities of NATURAL BALSAM TOLU have been on offer at USD55.00 per kilo CFR world ports via air.

With a few exceptions the Indian market remained unchanged during April. Good quality of Chinese GINGER OIL being in short supply enabled Indian suppliers of this oil to raise their price during April, the latest business having been concluded at USD110.00 per kilo CFR via air. MENTHOL BP/USP prices dropped somewhat in recent days. The latest offers received varied from USD12.50 to 12.75 per kilo CIF world ports, with OIL PALMAROSA, testing about 80% Geraniol, offered at USD13.75 per kilo CFR world ports in ton quantities. The latest OIL SANDALWOOD offers were made at USD1,400.00 per kilo CFR world ports via air.

The price and availability of OIL CANANGA remained stable during April. CITRONELLA OIL 85/35 continues to be more competitively priced than Chinese oil. Lack of demand resulted in the price declining to USD4.25 per kilo CFR world port, in container quantities, in recent days. CLOVELEAF OIL 80% is currently offered at USD4.25 per kilo CFR world ports, in container quantities. EUGENOL (minimum 99%), in minimum 5 ton lots per Bill of Lading, is currently priced at USD5.00 per kilo CFR world ports. KAFFIR LIME OIL (Citrus Hystrix) has been quoted at USD110.00 per kilo CFR via air. NUTMEG OIL prices currently range from USD34.00 to 35.00 per kilo CFR, depending on quantity and supplier. PATCHOULI OIL (32% Patchoulol) has been on offer at USD35.00 per kilo CFR world ports. VETIVER OIL (minimum 50% Vetiverol) has been on offer at USD77.00 – 80.00 per kilo CFR world ports, in minimum 3 drum quantities.

Depending on quality, ARMOISE OIL has been on offer at USD57.00 – 69.00 per CFR, PENNYROYAL OIL at USD24.50 per kilo CFR, ROSEMARY OIL at USD23.00 per kilo CFR and RUE OIL at USD88.00 per kilo CFR. Limited quantities of ROSE DAMASCENA CONCRETE are currently quoted at Euro 755.00 per kilo FOB, ROSE CENTIFOLIA CONCRETE at euro 2,085 per kilo FOB.



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