Market Report
CITRUSANDALLIED.COM
CITRUS AND ALLIED ESSENCES MARKET REPORT MARCH 2014
March 2014 Volume
Page 1
4Orange oil
4Lemon oil
4Page 2
4Lime oil
4Grapefruit oil
4Tangerine oil
Page 3
4Rob’s Crystal Ball
Page 4
4Essential oils
4Cananga
4Davana
4Ho Wood
4Lavender/Lavandin
Page 5
4LemonGrass
4Mint- Pepermint/spearmint
4Spice Oil & Oil Extracts
4Cassia & Natural
Bezaldehyde
4Cardamom
4Clove leaf
4Coriander
Page 6
4Cumin
4Ginger
4Mandarin Petitgrain
4Nutmeg
Page 7
4Pimento Leaf
Orange Oil
The smallest crop since the 1960s in
Florida has been caused by the Citrus
Greening disease. By some estimates,
almost 50% of the citrus crop in Florida
has been affected by this disease
without a cure. This has not only
reduced the amount of fruit but also
reduced yields due to the small size of
the oranges. Small crops in Florida are most likely to
continue until a method for controlling Citrus Greening
is both identified and implemented. With a small crop in
Florida, the producers in Brazil are being careful not to
sell forward until the size of their crop is well
understood. We expect the price of orange oil to
remain firm. There has also been a meaningful
increase in the price of D'Limonene, yet another
confirmation of higher prices for orange oil.
Lemon Oil
The sharp decrease in
expected production for lemon
oil from Argentina has moved
the price of lemon oil sharply
higher. By some estimates,
during the next season
beginning in June, Argentina
will process only 60% of the
amount of fruit processed in 2013. Considering how
important the production in Argentina is to the world's
demand for lemon oil, we may be in for a shortage and
record high prices. A freeze in California also has not helped
with the aggregate supply of oil.
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Lime Oil
Due to Citrus Greening and low prices for lime juice
leading to indifferent maintenance of lime ranches, the
availability of lime fruit in Colima was reduce by 50% in
2013. Prices began on the firm side that discouraged
buyers from booking forward. This only reduced the
interest in processors from buying fruit and hence most
of the factories in Colima remained closed throughout
the season. By the time a real shortage was evident,
the price of distilled oil had almost doubled and the
availability of expressed oil was practically non-existent.
In Michoacan, at late opening to the season, the limit to the availability of fruit never made
up the significant gap in the availability in Colima. Currently, there is a shortage of lime oil of
all varieties. Prices are very high and we expect them to plateau until July. By June, the
availability of fruit should make production in Colima possible. The price of the fruit will
determine the price of the oil.
Grapefruit Oil
The demand for Grapefruit Oil is rather small and that fits
the supply well. Prices have moved up but not anywhere
near the increases experienced with lemon and lime. We
do not anticipate any significant movement in either supply
or demand during 2014.
Tangerine Oil
The supply of tangerine in Mexico is significantly lower than
in 2013. This is not good news and may lead to somewhat
higher price. The jury is out on this one because the demand
appears to be in harmony with supply. Only time will tell.
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Rob’s Crystal Ball
In the past 60 days I have traveled to Central America, Europe,
India and Sri-Lanka to listen and learn so as to stay up to date
and to pass along our findings to you by way of this report.
The Chinese New Year is over and our producers are all back to
work. The excitement of the Winter Olympics is also behind us
as is the first year of President Obama's second term. Based on
the news coverage, you would think the next Presidential election
is coming up soon, but it is not.
In recent months we have seen the continued focus of the
Chinese government to control the amount of pollution and
improve the environment. This can and has resulted in plant
closing and relocations. In India & Indonesia, the May elections,
could have influence on a number of products as currency
volatility is quite common during periods of change. As most of
you are aware, our portfolio of products numbers in the many
hundreds. For that reason, we are exposed to a variety of inputs.
And since we are diversified in aroma chemicals, citrus, spice
and mint essential oils our views and insights come from
conversations in many parts of the globe.
In a nutshell, weather wins. Not supply and demand you ask?
Our answer is that the demand for most essential oils is almost
always in sync with supply because the demand for most
products is mature and predictable. For that reason the market
has an anticipated demand and producers are prepared for what
they are used to. So what is left to move prices are factors that
influence yield and cost such as weather, labor and currency
exchanges. Heretofore, the demand for most products has been
somewhat higher than anticipated because the national demand
within the fast-growing economies in India and China has been
increasing and hard to predict. For the first time in a long time, it
appears the growth of indigenous demand from these countries
may have slowed. More than any other factor, this has made it
possible for prices to assume a steady course.
Certainly, crises such as what we are seeing with lime, lemon
and coriander will come and go but if the world experiences an
extended period of slower growth, it is possible that dramatic
price swings may be the exception rather than the rule. For
those of us involved in the global supply chain management, that
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would certainly be a welcome change. Should the economic malaise continue, we may arrive
at a point where growers will hold off on planting and producing unless they have
commitments. As you will see in this report, a small handful of citrus oils are under pressure
caused by disease and uncharacteristic weather. Therefore, we will continue to do what we
do every day and communicate and visit our traditional and new suppliers face-to-face to
make the best recommendations we can for our customers. In the land of essential oils,
almost every product has a story and always an interesting one.
Essential Oil
Star Anise & Natural Anethole
This southwestern essential oil grown in the Yunnan
province of China has gradually softened over the past
year and appears to be at a low level for close to a year.
It is reported that the current price is not profitable so the
farmers may decide not to collect the fruit and leaves in
the mountains during the smaller spring harvest. The
peak crop time is October to January. We continue to be
in a strong position and welcome your inquiries.
Basil
The upcoming July crop in Vietnam crop looks good but
the weather will be the determining factor. We
recommend staying ahead while our stocks last and The
price is stable.
Bitter Orange
The crop in Brazil is over. As previously noted, the lack of
demand a few years ago led to many of the trees being
eradicated. Accordingly, this had led to continuing short
crops. To compound the situation, poor availability and
rising costs in the Dominican Republic have added more
pressure on prices. We continue to contract and take as
means aggressive positions as possible but cannot get
the volumes we wish to procure due to the lack of availability in both the northern and
southern hemispheres. Given the circumstances, it is important to give us your requirements
ahead of time so we can do our best to cover your needs.
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Buchu
The news from South Africa is a robust demand with firm
prices. We would recommend staying ahead on this oil
and welcome your inquiries period.
Cardamom
The Guatemalan crop is almost over and the 2013/2014
crop is well below last year's crop, but average compared
to normal seasons. In recent weeks the price of seeds
have been increasing rapidly, which should cause
firmness in the oil over the next 6-9 months. The Indian
crop was estimated to be about? 15MT which also is an
average size crop. Since we are significant buyers, we
have a good position on this very popular Middle Eastern
spice essential oil.
Carrot Seed
Carrot seed continues to be short due to two consecutive
short crops. If you have sizeable needs we recommend
staying ahead on this unique oil.
Cassia & Natural Benzaldehyde
With the fall (October to December) crop completed the
market looks to be stable for the short term. However,
with the higher labor costs and low cassia prices it may
discourage the collection of leaves and twigs for the
spring (May to July) crop, which in turn will push up the
prices during the 2nd half of the year.
Cinnamon Leaf
Having just returned from the growing region in Ceylon
the prices are about to reverse from a downward trend.
The recent low prices and very dry weather and
unpredictable rains will hurt the yields, availability and
firm the prices. From a historical stand point, the prices
are on the low side and should increase to support the
farmer's interest in harvesting this beautiful essential oil.
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Citronella Java
This commodity-like essential oil is showing signs of
weak demand which is causing the market to soften. The
next crop is April-May.
Clove Leaf & Eugenol
We have noticed increased prices due to a weak
Indonesian currency and some availability pressure. The
next crop is in March-May. Prices are forecasted to
remain firm.
Coriander Seed
As mentioned in our last report, the price and availability
of pure and natural coriander seed oil came under
intense pressure as no seeds existed to make oil at
source due to the ruined September harvest. In turn,
prices have doubled and the pure and natural oil is
scarce at best. At present, it is far too early to predict
what will happen but the Russian-Ukraine-Crimea conflict
could also influence this crop's short term future.
Cumin Seed
With the continued political instability in the Middle East
we recommend covering your needs and staying ahead.
In spite of all the uncertainty the prices have remained
calm but that could change overnight. The next crop is in
April.
Ginger
As the spring season comes to a close with very little
processed oil we witnessed prices inching higher by the
week over the past few months. The next harvest period
is August to September which we hope will calm the
market.
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Ho Wood (Natural Linalool)
Due to the extreme heat in the growing region, the
production and availability of ho wood oil in China was
significantly reduced. Accordingly, prices have
meaningfully firmed as the oil is in short supply. We
continue to have material on hand but we need to hear
from all customers who have large requirements so we
can plan to meet your requirements.
Lavender
We have heard the inventory that existed in Eastern
Europe is in better balance and prices have bounced off
the lows we have seen over the past 6 months. All in all
the lavender market appears to be stable. The next crop
will be in August.
Lemongrass
In a repeat of our last report, we see lemongrass the
same as the previous year. Again, we must also point out
that we continue to contract in advance so that the
Guatemalan lemongrass is planted and distilled twice
each season for our customers. Please send us your
inquiries while supplies last.
Litsea Cubeba & Natural Citral
The distillation has come to an end. Given the low price
of the berry and the warm weather the output decreased
10-20% compared to last year. We continue to
recommend figuring out your needs and contracting
before the price begins to firm.
Mandarin Petitgrain (Mandarin Petitgrain
Terpeneless)
The processing in Egypt is in full swing since January.
The crop was average but the carryover from the prior
year has kept the prices from increasing as it usually
does after the harvest and distillation. In this part of the
world it is safe to keep some extra inventory or be sure
that we have you covered.
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Spice Oil
Davana
In face - to - face meetings with our growers in
Bangalore, India, we hear this years crop is significantly
(60%) down due to rain damage, lack of labor, land
development out of agriculture or to food crops. We
recommend you contact us immediately if you have
needs over the next 12 months so we can try to cover
your requirements. As it looks today, the demand should
outweigh the supply.
Eucalyptus & Eucalyptol
For well over a year the lackluster demand had kept
prices soft. However, with the recent frost in the Yunnan
province during December and January, it’s reported to
have killed many trees. This along with the lack of
interest of farmers to collect raw materials should have
influence on moving the market higher as has been
recently witnessed in the past few weeks.
Garlic
Garlic prices are on the rise! For the first time in many
years some garlic oil was distilled in 2013. This was done
to blend with all the older non FCC oil. The next crop
time in June/July will be the time the Chinese will decide
to make more oil or not. The decision is primarily based
on the price of fresh garlic bulbs. In the meantime, higher
prices and finding good quality oil will be a difficult task.
We have excellent quality stocks to offer you in the near
term.
Geranium
While the 2013 harvest was below the norm, the demand
has fallen as well. Therefore, prices remain stable with
good availability. The Egyptian oil has also softened in
price and is always an alternative.
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Mint – Peppermint / Spearmint
Having just returned from India,I've learned the Mentha
Arvensis crop is anticipated to be 40,000 MT which is
significantly down from last year's bumper crop. Mentha
Arvensis derivatives, like menthol, seem to be trading in
a stable range, with minor volatility, and in the same price
range as synthetic menthol. The Spearmint Indian crop
looks to be the same as last year as prices soften.
Mentha piperita looks to be slightly smaller than last year.
The Indian Rupee is down from a high of 68 rupees to 1
USD to a present 62 rupees.
American growers are planning for the 2014 planting and
end of summer harvest. The Idaho growers are
concerned with the water supply. The prices of American
peppermint and spearmint are firm. We will update you
again when we visit our peppermint fields and growers in
the Pacific Northwest.
Nutmeg
The prices over the past 6 months have softened slightly
due to the weaker Rupiah. In recent weeks, the prices
have firmed again as the Indonesian Rupiah gained
against the US dollar and finding good quality lots of
Nutmeg oil continues to be a challenge.
Palma Rosa
Prices continue to firm and could easily increase during
2014. Palma Rosa oil is harvested 3-4 times a year.
Petitgrain Cordillera
We have seen recent shortages in supply with producers
vying for the limited amount of raw materials. We hope
by September, at the next harvest, we see better
availability.
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Pimento Leaf
The recent season has come to a close and the supply
should just meet the demand. We might also speculate
that there is very little additional oil in the market place if
demand picks up. Due to this situation we strongly
encourage you to notify us of your needs long in
advance.
Rosemary
The market is very firm with very little oil at all sources.
We hope with the April crop in Tunisia and Morocco it will
help satisfy the ongoing demands. We will be monitoring.
Sage Clary
The news on this essential oil seems to get worse by the
month. At present, the availability is close to non-existent
and we have reports that the availability could decrease
in 2014. In the near future, the demand will well exceed
supply.
Wintergreen
The 2013 crop was limited and prices have sharply
increased shortly after harvest. It is reported that there
are almost no stocks at source. Therefore, we
recommend covering your needs with us now to be sure
you are covered. The next crop cycle will be in
September, which is the best time to look at fulfilling
2015 requirements.
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