Supplies have slowed due to weather conditions but remain reasonable, so general availability has not been impacted too much. The quality of raw material remains good and overall we are experiencing some stability with this product and no foreseeable changes ahead.
Cananga prices remain high with little or no material available. The cananga flower is collected from the tree branches but today harvesters are hesitant to climb trees in the current poor weather conditions. This is likely to continue for the next couple of months, as conditions are not expected to change quickly.
Citronella supplies are suffering as a result of excess rains and flooding, along with very strong domestic demand. The wet conditions are causing much lower yields and the net effect is less material available domestically and even less for export.
Clove is certainly in crisis conditions. Supplies have been slow throughout the year, as Indonesia, in particular Sulawesi, didn’t really have any dry season in 2017, which is when most of the harvesting occurs. As such, we now find ourselves back in the wet season with no carry over supplies and little or no harvesting at this time. Normally we wouldn’t expect to see drier conditions until April, so expect prices to continue to rise in the short term, or at least until we hit a sustained period of dry weather.
Read more about the clove markets here
Ginger prices continue to firm with some strong demand from the market. Quality is an ongoing issue with many variations coming from different parts of Indonesia, many of which have a low Zingiberene content. Only those with good rectification processes can bring material up to standard but these processes come at a cost. When reviewing price offers this is a typical example of you get what you pay for.
Mace supplies have been steady despite the ups and downs of nutmeg supply. No real change is expected in the foreseeable future.
Product continues to be available although quality issues remain a concern for some. There is no over supply in the market as many believe, just material more easily accessible locally allowing more people to trade the product. We don’t expect any major changes soon.
Nutmeg markets remain stable and at today’s price levels most of those involved in the supply chain are reasonably happy. Buyers should be vigilant regarding some poor qualities that are circulating in the market, which may look price attractive but may not be up to expected standards. Production looks like it is meeting market demand fairly evenly so no major change in prices or conditions are expected in the immediate future.
Patchouli supplies from Sulawesi have started to slow down quickly as we approach a period of smaller harvesting (seasonal formalities), which comes after a very strong couple of months of sales. As a result, stocks have been significantly depleted and there have been some upward price movements in the local market. Those collecting material are now paying 20,000-25,000 IDR more per kg, which is the equivalent of $2 or 10% in real terms. After a long period during which there was the idea that the market must have bottomed, it most certainly seems to be the case now, with this period already behind us.
Patchouli supplies from Sumatra have been stable (although in much smaller volumes than those from Sulawesi) but a recent surge in demand from the market has helped push prices up.
Overall it still remains a very good time to invest in patchouli stocks. For those waiting for prices to keep falling you may have already waited too long, with many large buyers having jumped into the market in recent weeks and most processors now having to buy fresh material at today’s new price levels.
Over the years the process of obtaining patchouli oil has gone further than simple steam distillation. The quality of raw material, particularly from Sulawesi, has meant that to obtain the quality the industry expects then a further process of fractionation is required. From this process we obtain the product patchouli terpenes and with it, a fully natural, versatile by-product, which in today’s market offers some interesting applications.
In a market where cheaper naturals seem to becoming more and more scarce our patchouli terpenes offer clients an opportunity to formulate with a cost effective ingredient.
With prices cheaper than today’s citrus terpenes can you afford not to be looking at introducing this new ingredient?
Vetiver supplies are once again slowing down and the material that does become available is regularly high in acid. Educating distillers not to overheat the product in order to speed up distillation is also an issue as it leaves a string burnt note to the odour, which takes a lot of time to rectify to bring it up to any sort of standard. Don’t expect any short term improvement in quality, supplies or prices.
Ultra International B.V.
