Market Newsletter
July, 2000
Recent adverse weather conditions in many areas have impacted on the availability of a number of essential oils, possibly leading to higher prices in the near future.
ARGENTINE ESSENTIAL OILS
Even before the onset of the current unusual cold weather, LEMON OIL prices have been increasing. To date we are without information as to whether there has been any crop damage that might result in further price increases. Depending on quality/quantity and supplier, offers are presently in the USD14.50 - 15.00 per kilo FOB range. ORANGE OIL prices continue to be higher than from any other origin. This also applies to the very limited quantities of OIL GRAPEFRUIT remaining for sale. Limited quantities of GREEN MANDARIN OIL have remained unsold due to the oil being offered at a substantially higher price than Brazilian oil. This year's small production of OIL TAGETTE has already been sold and we are currently without offers for OIL CITRONELLA.
BRAZILIAN ESSENTIAL OILS AND AROMATIC CHEMICALS
While supplies of new crop GREEN MANDARIN OIL will cover normal demand at competitive prices, available BITTER ORANGE OIL quantities fall far short of world demand. Last year's drought resulted in a smaller crop, part of which has been destroyed by the July freeze in the producing area. Most of the TAHITI LIME OIL C.P. produced this year has been sold - but LIME ESSENCE WATER PHASE and LIME TERPENES C.P. are still available in sufficient quantities. New crop ORANGE OIL is nominally priced at USD1.00 - 1.10 per kilo, CITRUS TERPENES (D'LIMONENE) at USD1.00 per kilo FOB Santos. It is possible that the 2000/2001 production will fall short of last season's - depending on juice production levels. ROSEWOOD OIL prices have declined to below USD40.00 per kilo FOB Manaus, due to low demand. BALSAM COPAIBA prices have remained at around USD4.60 per kilo FOB Manaus. Here again, only sporadic interest is shown in the world market. Prime quality OIL EUCALYPTUS CITRIODORA, testing 75/76% Citronellal, continues to be offered at substantially lower prices than Chinese oil. New crop OIL PALMAROSA is still unavailable, while interesting quantities of LEMONGRASS OIL 75% are offered at USD11.50 per kilo CFR world ports.
CHINESE ESSENTIAL OILS AND AROMATIC CHEMICALS
New crop distillation of CASSIA OIL is still in progress, with the yield this season having dropped from 0.7% to 0.6% due to last winter's adverse weather conditions. Additionally, production is estimated to be further reduced due to the current oil price, the lowest in twenty years. Reportedly, the most important buyers have not yet placed new orders and traditional exporters speculate that the price will rise again once the large buyers reenter the market. CITRONELLA OIL demand has been rather brisk, with only limited quantities available at high prices, due to previous heavy rains impacting on distillation and transportation and limited availability from other origins. OIL EUCALYPTUS CITRIODORA production continues to drop and prices, in the USD5.00 per kilo CIF range are substantially higher than Brazil's. EUCALYPTUS GLOBULUS OIL 80% production has not yet recovered from the aftereffects of last winter's low temperatures and is lower than normal. We understand that some speculative sellers have had problems fulfilling contracts entered into at prices below USD4.00 per kilo CIF. The current price ranges from USD4.30 to 4.60 per kilo CIF world ports, depending on quantity and supplier. With several major buyers having visited Yunnan recently - new purchases may lead to even higher prices. As previously reported, due to last winter's frost damage, the GERANIUM OIL production suffered substantially. This, coupled with speculative purchases of interesting quantities made some weeks ago, has resulted in steep price increases during July, while Egyptian oil remains competitively priced. MENTHA ARVENSIS OIL distillation is taking place from late July through August and the quantities produced are estimated to be at least 50% greater than last year. This increase is based on the high prices obtained by the farmers last year, yielding a better return than cereal crops and vegetable oils, as well as favorable weather conditions. New crop OIL MENTHA PIPERITA will be available late August/September, in limited quantities. STAR ANISEED OIL pricing may have reached bottom - as the demand for the spice has been quite active this year. With many SYNTHETIC AROMATIC CHEMICALS based on petrochemicals feedstock at increasing prices, producers and exporters indicate that they are looking for higher prices if/when demand normalizes once again. Meanwhile, Turpentine prices have increased by about 20% adding to the cost price of derivatives like CAMPHOR POWDER, TERPINEOL, PINENE, etc.. Depending on manufacturers' existing feedstock inventory, once used up, this may result in the reversal of current low prices.
INDIAN ESSENTIAL OILS AND AROMATIC CHEMICALS
While Indian shippers offer MENTHOL BP/USP in container quantities at USD12.50 - 13.00 per kilo CIF world ports, a number of resellers have been marketing spot lots - in less than container quantities at equivalent prices. The new crop mint picture at origin remains unclear - but several traditional suppliers advise that they do not foresee any dramatic price increases, in light of present market conditions. New crop LEMONGRASS OIL 75% is offered at USD12.00 - 12.50 per kilo CFR. Small quantities of OIL CARDAMOM have been offered at higher prices than Guatemalan oil and found no interest in the market. OIL MENTHA PIPERITA has been offered at USD 18.00 - 19.00 per kilo CFR world ports, with no buying interest showing at this level. Various mint derived AROMATIC CHEMICALS continue to be offered quite competitively. SANDALWOOD OIL remains unavailable. Shippers are still awaiting export licenses to fulfill contracts entered into as far back as 1999.
INDONESIAN ESSENTIAL OILS AND AROMATIC CHEMICALS
The demand for traditional Indonesian oils and aromatic chemicals, derived from CLOVELEAF OIL, has been relatively weak for several weeks and prices have remained stable. Future market developments for CLOVELEAF OIL and respective derivatives will undoubtedly be influenced by Madagascar's oil production, as will the development of the CITRONELLA OIL market depend on the new crop situation in China and Vietnam. SANDALWOOD OIL offers have been missing for some time.
INDONESIAN ESSENTIAL OILS AND AROMATIC CHEMICALS
Limited quantities of OIL CANANGA have been offered below USD30.00 per kilo CFR world ports, with demand lacking. While CITRONELLA OIL prices strengthened, OIL CLOVELEAF and CLOVELEAF DERIVATIVES prices remained stable during May. Traditional suppliers informed us, however, that near future price developments will be influenced by Madagascan oil availability and pricing. NUTMEG OIL prices receded during May, with min. 9% Myristicin content oil dropping into the USD43.00 per kilo CFR range. OIL PATCHOULI prices have remained unchanged, but trade sources report that increased quantities of oil containing relatively low Patchouli Alcohol are showing in the market.
PARAGUAYAN ESSENTIAL OILS
The PETITGRAIN OIL supply situation worsened during July. Freezing weather has curtailed distillation substantially. With no offers forthcoming at this time, the nominal price increased to minimum 27.50 per kilo FOB Asuncion. OIL CABREUVA continues to be available for prompt shipment at USD20.00 per kilo FOB. Limited quantities of OIL EUCALYPTUS STAIGERIANA are presently priced at USD10.00 per kilo FOB.
