Citronella oil is extracted from a grass (Cymbopogon winteranus) native to Sri Lanka, Java (Indonesia) and China. The species Cymbopogon winteranus is used for the production of citronella oil by steam distillation.
Citronella is commonly used in soaps, candles, perfumes and other products in the cosmetic industry. It is also a plant based, non-toxic insect repellant, registered for this use in the United States since 1948. You will find it listed in many topical products.
As a perfumery ingredient it has been historically well represented due to its citronellal, citronellol and geraniol content.
China is the world's largest exporter of citronella oil (Indonesia being second). It is estimated that total world production of citronella is around 4,000 tons with China and Indonesia representing a 40% share of this volume.
Historically China has had a lower cost basis for this product and as a result is the dominant producer.
Based on unconfirmed data China's citronella exports can be summarised as follows:
Going by initial reports, the rains have lashed the plants and so the current crop is expected to be quite small. Most processors are unwilling to enter into negotiations, as they believe that prices will steady out in the near future. Currently, citronella is in relatively short supply; and prices are skyrocketing. Production was small, around 400 MT in 2018 although some sources put it higher. Nevertheless, it was substantially below 2017 levels, and prices are very high. Stimulated by high pricing, production may surge to reach around 500 to 600 MT. With oil from neighbouring Vietnam buoying supplies, the high prices were somewhat alleviated. However, the market seems to be perturbed since there is almost no oil to be found. On one hand, there is hardly any new oil from the planting areas; and on the other hand, carryover is getting limited. Those who are holding stocks are reluctant to sell in anticipation of higher margins. The situation was expected to ease out after the Chinese New Year holidays.
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