The market remains firm despite enhanced capacity; with demand levels reaching a new highpoint in the aromatherapy arena. If the patent on the distillation process is renewed in 2018, then the monopoly stronghold continues unabated. If not, we must prepare for competition later in the year.
The market maintained momentum with sales and production escalating at a healthy organic rate. The distillation facility has been upgraded, leading to availability of larger batch sizes. On-ground available stock implies accelerated turnaround times.
The total size of Australian production is estimated to be not larger than 7 MT per annum. With demand soaring by almost three fold, the market remains under pressure to deliver. This has led to a rise in prices. Fresh investments have buoyed hope that by 2018 newer plantations will yield more available material.
There are a number of sources within Australia producing this unique essential oil as for the most part it is a native wild bush widely available. In addition, there is a new facility already established which can produce much higher volumes of oil than that previously available thus opening up the possibility of Kunzea for new markets.
A new oil to market from the Queensland sandalwood species that has traditionally been used for incense and carving. It has a light woody odour with a slight citrus undertone and has a lovely golden colour. It can be produced in reasonable volumes on a sustainable basis and you really do need to sample this oil to appreciate how good it is – production is up to 5,000 kg per annum.
The previous year saw some new production of oil from plantation wood starting to be introduced which marks the start of what should be an ongoing improvement over the next few years and beyond. It comes at a welcome time as relying on government wood contract changes, which had been promised, became a futile process with disappointing outcomes.
Despite this, the market should be optimistic about the future as over the next few years it won’t be what the government controls that influences the market but the continued introduction of plantation wood.
There is no doubt that in the past couple of years the global market demand for tea tree has increased as both China and South Africa’s output has also increased. It’s unlikely that based on December 2017 local inventory levels there will be enough material to satisfy the market until the new 2018 season starts around June, thus leaving the possibility of increasing prices.
Ultra International B.V.
