Lemon Oil Citrus limon (L.) Burm. F. Harvest: May - July

We reported at the end of the first quarter than there could be some difficult times ahead for Argentinian lemon oil. The crop forecasts, growing fresh fruit demand (in export markets) and the predicted fruits available for processing would leave a hole not just in Argentina’s supply but the global lemon markets. The only question was how big that hole would be and now that we’re in July we’ve started to see these potential problems unfold.

Heavy rains and flooding at the end of last year and the beginning of 2017 have led to a 10% fall in Argentine citrus production this year according to forecasts released by Federcitrus and the USDA in April. However many are now suggesting this was underestimated and the fall will be between 20%-30%! This is disappointing news to many, especially those producers in Argentina who would have hoped to take advantage of the reopening of the Brazilian market after an 8 year absence and the end of a 16 year US ban on imports – two factors which will increase demand for fresh fruit both now and in the future. Mexico also announced in July that its doors are to be re-opened for imports.

Whilst production is likely to be down 10% on last year, it is more significantly down on a 10- year average and as such prices for fresh fruits have risen in recent weeks.

With the fresh fruit market still the most attractive avenue for most sellers in terms of revenue, it will be the processing market that suffers the most. Supplies to processors are likely to reduce between 15-20% on 2016 figures, unless of course they pay the higher prices, which will be reflected in the juice and oil price.

As this scenario has been on the cards for some months many of the major buyers have ensured they took sufficient cover. As a result, large volumes of oil have been purchased in recent weeks/months, to the point where not many producers in the region are prepared to make new offers. Those who do have surplus stocks are looking to capitalise on these market pressures, which have seen prices increase 20% in the last few weeks

Where this will end is likely to be down to how far the major end users have covered as continued pressure on demand will certainly keep prices rising.

Blue Cypress Oil Callitris intratropica Harvest: All Year

Markets have firmed in recent months despite an increase in capacity. Driven by the growing aromatherapy market demand has reached new levels. With a monopoly on production until the end of 2017 it is expected that the next few months will remain difficult but plans are afoot to find new processors in 2018 should the Australian patent rules allow. This is needed to ensure the market is fulfilled and overall supplies remain sustainable.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Buddawood Oil Eremophila mitchellii Harvest: March - October

There continues to be steady progress with sales and production increasing at a healthy organic rate. Recent upgrades to the distillation facility have increased capacities with larger batch sizes now available.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Eucalyptus Horistes Oil Eucalyptus kochii Harvest: April - November

The oil is available and can be scaled up in the short-term to as much as 20 MT annually should it be required. It is now on trial for a number of new applications so we expect to see an upturn in demand very soon.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Eucalyptus Radiata Oil Eucalyptus radiata Harvest: April - November

The total size of the Australian production is hard to calculate but it is not thought to be any larger than 7 MT per annum with demand possibly 3 times this!

There are several known investments in place to ensure that by 2018 there is more product available from newer plantations but currently pressures on the market remain in place with prices rising on the back of more trading and desperation from end users to secure material.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Kunzea Oil Kunzea ambigua Harvest: September - January

There are continuous investments into the harvesting and distillation methods and capacities across Tasmania with grand plans to produce as much as 5 MT over the next couple of years. These additional volumes are already committed to the growing aromatherapy demands so further investments are being considered

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Lavender Oil Lavandula officinalis Harvest: July

Late frost created some damage to this season’s production of Lavender Population which was in part offset by the increased growing areas. Clonal lavender production will decrease around 10% and Maillette around 15%. Total production of all types is estimated to be 70-80 MT with markets very firm given the global situation.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Lemon Myrtle Oil Backhousia citriodora Harvest: June - August

Markets are very difficult as they’re monopolised and demand is growing beyond the means of the supplier. Short term this will be a problem but there are some plans that are at an early stage to improve supply over the next few years. This is a must for aromatherapy brands but there needs to be some caution for now as to what supplies are available given the fact it will be a successful product.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Rosalina Oil Melaleuca ericifolia Harvest: April - November

There are now two qualities in the market as different growing regions within Australia produce different qualities of the same botanical. Supplies on the mainland have been limited so the introduction of a sustainable alternative (referred to as Southern Rosalina) has been very welcome, in particular in the aromatherapy sector. Expect supplies to improve into 2018.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Sandalwood Oil Album Santalum album Harvest: March - November

For the moment we’ve stopped talking about the amazing 20-year investment projects to bring sustainability to the Santalum album market and are instead focused on concerns for the financial viability of the two largest plantation holders.

The two plantation companies based in Australia appear both to be in difficulty since the last report. Quintis (formally TFS) have had their shares suspended on the stock market for more than 2 months and there does not appear to be any certainty about what will be the outcome. Simultaneously their major competitor, Santanol, announced that they were in the hands of the receiver and again there is no definitive understanding of what this actually means as they are backed by the large American investment house, KKR. 

Referencing a number of articles from the Business News WA website (businessnews.com.au) Quintis’s issues started in March when when US short seller Glaucus Research Group claimed the company was like a Ponzi scheme. At the same time Managing Director Frank Wilson resigned to potentially be part of a business looking to take over Quintis. Some say he may be backed by KKR (the majority investor of Santanol)!

Then in May Quintis said it had only just become aware that its Santalis Pharmaceutical business had lost a contract supplying Galderma, a subsidiary of Nestlé. However, this was known to some within the group since December 2016 but not announced to its shareholders.

How this all impacts on supply of oil from either source is frighteningly unclear but it is definitely a case of watch and see how they both resolve their financial issues as supply from both is critical for the ongoing and long term supply of Indian sandalwood oil to the markets, especially as both have the capacity to relieve the pressure on illegally supplied oil from India with their sustainable resources.

Outside of the financial issues the production and supply of oil has been progressing well with one producer citing an increase of 10 MT of oil production for 2017.  Furthermore the introduction of Santanol as a secondary oil supplier this year should have brought more competition and continued reassurances to any end user of the long-term sustainability of supply but for the moment this financial cloud needs to clear.

There is little doubt that over the coming weeks / months there will be some clarity on the situation but any concerned buyers should seek reassurances from their respective suppliers.

Sandalwood Oil Lanceolatum Santalum lanceolatum Harvest: March - October

This is a relatively 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 slight citrus and floral undertones and a lovely golden colour. Unlike other sandalwoods whose feature is the base note, this oil feels rounded from the start. Its top notes are typically sandalwood and on dry out it loses none of its unique character.

Today supplies remain steady with the producers willing and able to supply up to 5 MT per annum. If you are going to add a new oil into your palette this year then consider this one. It won’t disappoint.

Tea Tree Oil Melaleuca alternifolia Harvest: May - November

Despite this we have seen once again just how resilient a plant tea tree is and the losses weren’t as bad as first feared. That said many farms are looking at losses in yields of anything from 20-30%. Whilst partially offset with the introduction of some new growing areas we still expect a reduction of around 100 MT of oil when compared with 2016.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Kumquat Oil Fortunella japonica Harvest: December - February

Interest continues to grow with tangible results now being seen in markets across Europe and Asia. Capacities remain at around 5 MT per annum but thoughts are in place to expand capacity given current interest and on-going development work at the end-user level. The growing area is said to be well protected from any unusual climatic conditions and therefore similar levels of production are expected during 2017.

Lemon Oil Citrus limon (L.) Burm. F. Harvest: May - July

Last season was reasonably good for this up and coming lemon-producing nation with many now happy to consider Brazilian quality as a straight alternative to Argentinian. Production is continuing to grow along with general demand, although most fresh fruits serve the domestic markets with only a small percentage sent for processing.

Lime Oil CP Citrus latifolia Harvest: January - April

Domestic demand for fresh fruits meant a reduction in the past couple of years of limes being sent for processing. It is anticipated that the net effect is around a 15% reduction in oil processing, a trend that we may continue to see.

Brazilian oil has strong competition from Mexico and within the EU is disadvantaged by the fact that Mexicans enjoy a zero tariff. Most exports are typically made early or late in the calendar year? after the Mexicans have sold their oil. Last year this was an issue as the Mexicans had surplus oil, this year it may be an advantage as they are expecting shortages. If global supplies dry up towards the end of the year expect some higher prices from the Brazilians.

Orange Oil CP Citrus sinensis Harvest: July - December

We’ve been monitoring the markets closely in recent weeks and months and keeping on top of the latest official figures combined with assessing comments and interpretations from those on the ground day-in and day-out.

The 2016/17 season was one to forget. The lowest crop in 10 years had a profound impact on the price of oil, as well as impacting on the juice and fresh fruit markets globally.

Now, as we enter the new season, there are some renewed expectations that the markets will correct themselves as official figures suggest a bumper crop over the next campaign.

We’ve done some number crunching and listened to the experts and this is how we summarise the current situation.

Those NEW numbers

We reported back in June and you’ve probably heard since that the 2017/18 (July 2017 – June 2018) season is expected to yield 364.47 million boxes, this according to estimates by Fundecitrus (an organisation covering the São Paulo producers). With an average 40.8 kilo box this equates to approximately 14.9 million tonnes of fresh fruit. This means production is 14% higher than the historical average in the area for the last ten years and a 49% increase year-on-year! The São Paulo area is the largest producing state in Brazil.

According to USDA estimates (reviewed late July and which cover the whole of Brazil’s production), the harvest will be up to 30% and amount to 19.2 million tonnes of fresh fruit. This will break the downward trend of recent years.

The favourable weather conditions are the reason for the good harvest. The largest part of production, 13.9 million tonnes, an increase of 4.8 million tonnes, is intended for the processing industry, with a primary focus on recovering juice inventories, which will in turn allow for more oil processing.

Why the sudden improvement?

The productive trees of the varieties that compose this estimate total 174.78 million. The emission and the glue of the flowering of the 2017/18 crop, which occurred between August and December 2016, was favoured by the low production of the previous crop, which provided a rest in the reproductive cycle and resulted in an increase of tree energy reserves.  Additionally the good timing of hot and dry days followed by healthy amounts of rain (at the correct times) helped the number of flowers and subsequent development of fruits.

So the problems are over – or are they? Not yet!

Stop for a moment as this is the important bit. These extra fruit volumes are likely to lead to a longer season, which can in itself actually cause problems. A longer harvest period can increase the exposure of fruits to pests and diseases with further potential of fruit drop.

With this potential fruit drop in mind we need to take the overall numbers with some caution. It’s unlikely that the net increase in oranges going to processing will increase at the same rate as the increased crop size and with this we should be realistic about our expectations for additional supplies and the potential improved pricing.

Orange oil exports have been slow during the first 6 months of 2017 compared to the same period last year at a figure of around 20%, or 1,800 MT in total volume. This shows there is a lack of stocks currently in Brazil which will add pressure over the coming months as export supplies are always at their lowest between June and August.

We must also consider that the market is starved of supply. In recent years there has been little carry over into the new season but this is the first season to start with a significant deficit of contracts still to be fulfilled from last season.

Oil Production

Let us translate all of this into real oil production figures. To give more perspective we’re including Florida’s figures into our assessment as between the two producing areas they contribute to over 90% of global oil supplies.

From the graph below you can clearly see the expected increase in the Brazilian crop will result in ore oil being produced but you can also see the constant decline from Florida due to their ongoing issues with citrus greening.

From here you can see the total output (grey line) shows overall production retuning to levels not seen since 2013. That all sounds good but when you look at the 14-year average (red line) you can clearly see the gap between this seasons forecasts and the volume required for an ‘average’ year – it’s around 9,000 MT.

Factor in the volumes owed by the major producers to clients from unfulfilled 2016/17 contracts of around 6,000 MT a large gap starts to emerge. This 15,000 MT gap between what an average year looks like combined with the new forecasted volumes indicates to us there is a 30-35% shortage still before the market returns to normal and this is why we believe it will be still some time before you find prices falling and supplies easing.

Today prices are at an all time high with average FOB prices now double those of 2 years ago, at $9.45 /kilo. Therefore, when you add shipping costs, duties and any intermediary traders’ margins (as these FOB prices are only relevant if you’re buying multiple containers from origin directly), it is no wonder that your delivered prices today are around $12 /kilo.

Let us summarise and also consider some other factors:

• Market conditions – prices never fall as quickly as they rise!
• Major supplies controlled by three main producers (40% of total orange production and 98% of juice exports!)
• Stocks of oil at origin are very low with no carry-over supplies
• June-August are very low export months so there’s no immediate improvement in supplies expected
• Prices have increased over the past year despite real oil export figures not really declining so why will more fruit processed mean lower prices during 2017/18?
• New season offers from the major producers show no sign of prices falling
• The season will start with the major producers owing around 6,000 MT of oil to fulfil existing contracts!

Summary

Supplies are expected to improve later this year but how this will impact on prices is not yet known. It is important not to be blindsided by headline figures of improved crops as it’s just one variable in a complex market. Yes, we all hope the situation improves soon and, yes, we all hope prices can soften as a result, but if you’re patiently waiting for this to happen whilst your stocks are slowly depleting then be careful, as we may have to wait a little longer before things improve.

Lavender Oil Lavandula angustifolia Harvest: July

We arrive at the end of this season in completely contrasting circumstances to this time last year, through a mixture of increased global demand and a poor 2017 harvest.

It’s hard to imagine the difference. This time last year production was up around 80MT and with signs of an oversupply, prices started to fall. However, during the off season (around New Year) all carry over stocks suddenly vanished leaving supplies in the months prior to the new season getting shorter and shorter and prices starting to firm.

From late April, news started to emerge that the 2017 season may not see the increased volumes the market had been expecting and instead something a lot smaller than 2016, with estimates falling back to 2015 production levels. From here prices started to rise once again. The early stories turned out to be spot on with concerns verified to the market once harvesting began in July. From this point the news has only been negative and with other producing nations following suit the lavender market has turned very difficult.

Agronomists advised that the plants were weaker and stressed at the time of harvest. Not only were some areas of plantation damaged after the poor weather conditions in Spring but the yields from these stressed plants also suffered with 80-100 kilo of biomass needed to produce 1 kilo of oil. This is usually closer to 60 kilo. In addition, average linalyl acetate levels are down around 2%.

Finally production numbers are hard to ascertain as there are no official figures coming from Bulgaria but we believe that figure to be around 200MT, significantly down on last year’s 280 MT and a far cry from what was suggested last year that we could expect something closer to 350 MT this year!

Demand has significantly grown in the aromatherapy markets – not just an increase in brands and popularity but with many brands becoming more aware of true botanical qualities and ensuring they use pure product rather than blends.

The poor crop is a result of poor conditions earlier in the year as late colds and heavy rains damaged plants.

Today there are limited options available to those looking to take cover as most volumes are already committed. Looking at demand patterns and pricing during the last off season you can only start to expect prices to continue to firm over the coming months.

Rose Oil Rosa damascena Harvest: May - June

Mother Nature kept us guessing for some time this season as of late Easter time the crop wasn’t looking healthy. Late colds and heavy rains brought wilted plants and some damage leaving us all concerned about the season ahead but then almost perfect conditions in the key weeks ahead of the harvest delivered some better than expected results. Total production volumes are inline with 2016.

There are some concerns over the quality of some oil shipped from Bulgaria this year. This may be a result of the earlier conditions or as some suggest, the blending of oil from other origins.  Good quality oil should have a citronellol content around 24-28%, however some seem much higher this year. It is also interesting when you look at prices from one producer to another as there seems to be a huge difference. Based on the average cost of rose petals and average yields you could say the raw material costs for oil (before processing costs) is already over €7,000 /kilo. Add distillation costs and margins and you should find prices above €8,000 /kilo. If you’re paying less then make sure your QC takes a good look at this one!

Cassia Oil Cinnamomum cassia Harvest: May - July, October - December

Markets have returned to a period of stability after some shortages and price increases late 2016, early 2017.  These came as a result of a smaller crop last year resulting in production falling almost 20% leaving little or no carry over supplies into the New Year. This year’s production has been modest to date but enough to meet demand and with additional supplies likely to enter the market during Q4 it is expected that prices and supply will remain stable.

Citronella Oil Cymbopogon winterianus Harvest: June - December

The global market this year has been firm as the two major suppliers, China and Indonesia had both experienced higher than average rainfall and lower than average production. China’s output last year dropped from 2,300 MT to 1,500 MT as a result of the inclement conditions. The early season in February/March brought a little relief to supplies and pricing but not much, as Indonesia has fallen further and further behind its usual production levels.  Now, as we’re in the main harvesting season, reports from Yunnan Province suggest continued rains will again impact on production levels keeping markets firm for the foreseeable future.

Eucalyptus Oil Eucalyptus globulus Harvest: July - October

It’s been a challenging year so far for this one as influences from outside the normal sets of dynamics have come into play.

On the back of a disappointing 2016 which saw 10% less oil production than the previous year, speculators have seized the opportunity to take advantage of a volatile market.

The last major crop, which ended in January 2017, was again lower than expected due to heavy rains and today prices remain at historical high levels. If you compare current production levels to that of 2015 you will find a 30% drop in total output which helps you realise why today prices are 30% higher at those times.

Fresh supplies should come online towards the end of the year but expect to see continued pressures on the market until at least this time.

Garlic Oil Allium sativum L. Harvest: April - May

There has been little change of late as it continues to be bad news. Depending on who you speak to, there has been either zero production or very little production for over 18 months. This has put immense pressure on supplies and with it market prices. Today, prices are higher than they have ever been with no real positive foreseeable changes on the horizon with environmental protection orders set to remain in place.

It takes 500 tons of garlic to make 1 ton of garlic oil and as such there is no profit in this oil unless the price of the oil keeps rising, and this seems inevitable.

Geranium Oil Pelargonium graveolens Harvest: May - September

Prices have continued to rise in 2017 on top of the large increases already seen during 2016.

The problem in 2016 was due to poor weather conditions and reduced planting as farmers looked to plant other crops like grapes after disappointing returns in previous years. This has resulted in the lowest production levels in recent history.

Higher prices had meant a return by some farmers to new crops and there was an expectation that output could increase as much as 20%. Sadly, the poor weather conditions will prevent this from materialising and as such prices are expected to remain firm and may continue to rise throughout the year. It is recommended that you take your position sooner rather than later.

Ginger Oil Zingiber officinale Harvest: January - April

The crop period ended in March 2017 having made little impact on the overall supply position for this oil. Environmental protection orders mean farmers have not been able to distil much oil even when raw materials have become available. So we still remain in the same position that we have been for a while now. There is no surplus oil available and most production is made to order. Price has in fact continued to rise during the course of 2017 and may continue to do so.

Lavender Oil Lavandula angustifolia Harvest: July - August

Over the past couple of years, the Chinese quality has lost some presence in the international market place as other origins continued to blossom. As a result, there has been little investment in new plantations leaving the total growing areas for this year similar to previous years.

Chinese farmers prefer to dry their flowers to sell to the local tourist markets and any oil production is also consumed domestically. In recent years, Chinese oil prices have been uncompetitive but this year may see them realigned with the market as other origin prices increase.

That said the season isn’t expected to be anything special and whatever volumes do become available for export won’t have a big impact on the overall supply situation.

Natural Citral ex Litsea Litsea cubeba Harvest: July - October

Prior to the start of the 2017 August harvest there are concerns that heavy rains will once again impact the crop. Like last year when a similar scenario played out, prices increased towards the end of the season (October/November) as it became apparent that supplies wouldn’t meet demand.

Prices are already relatively firm when looking at historical levels, a result of consistently poor crops. 2016 production was 40% down on 2015 and it is likely this year will see no improvement on last year’s totals. It is recommended to book new season material early.

Tea Tree Oil Melaleuca alternifolia Harvest: May - August

No real changes as markets remain stable with demand constant as in recent years. Demand tends to increase when Australian prices rise but the weak Australian Dollar has created cheaper Australian export prices in recent times despite local prices increasing this season.

As always, China exports vastly different qualities of tea tree oil and so called ‘tea tree oil’ so buyers should take care when comparing Chinese oil with industry standards from Australia.

This year saw a further increase in growing areas but with general demand for tea tree from all origins growing the market for Chinese origin oil remains fairly balanced.

Helichrysum Oil Helichrysum angustifolium Harvest: August - September

A number of new plantations came online this year which has given the market some welcome relief when it comes to continuity of supply.

After a couple of bad seasons in recent years due to restrictions on wild harvesting, plantation oil will help end users promote the oil in which some marketing efforts have already started.

Just as we have seen with other essential oils, when major aromatherapy brands endorse a product or open up new markets, demand booms. At least in this case the supply base is already prepared.

It could be that this year we see a short term oversupply but this isn’t likely to worry producers or see prices fall in any significant way.

Lavender Oil Dalmatian Lavandula angustifolia x Harvest: July - August

This is one lavender where production volumes haven’t really suffered this year unlike others across Europe.

Last year saw a bumper production and this year volumes are lower but only back to ‘normal’ levels previously seen before 2016.

Due to its natural composition, Croatian lavender acts as a more powerful antiseptic than other lavenders, making it ideal for household first aid kits and other medicinal antiseptic creams.

Basil Oil Linalool Ocimum basilicum L Harvest: June - September

The new season couldn’t come soon enough as market prices had risen dramatically earlier this year due to a lack of supply as a result of a poor 2016 crop.

The harvest started early August and will finish during September. Prices have eased on the back of imminent new oil, although it will still be a couple of months before oil is flowing as the first cut is usually small.

Expect a little more softening in prices during Q4 as supply and demand start to rebalance after a period of instability.

Chamomile Blue Oil Matricaria chamomilla Harvest: March - May

This year’s crop started in April and was considered to be reasonable. With most buyers entering the market at this time supplies today are limited but demand has also dropped off. It is expected that the markets will remain satisfied until the 2018 crop and with it prices will remain stable.

Coriander Herb Oil Coriandrum sativum L. Harvest: January - February, June - July

The market is fairly flat at the moment as most production is made to order around May-June and with some carry over supplies from 2016 still in the market there is no problem of availability. Prices for Egyptian quality remain higher than that of other origins but some prefer this type and are happy to pay the premium.

Cumin Seed Oil Cuminum cyminum L. Harvest: May - June

Prices remain stable but firm after the May harvest with supply and demand well balanced. As with last year you may expect to see prices rise later in the year as stocks at origin get depleted so always better to take your cover now rather than during the off season. Next crop May 2018.

Geranium Oil Pelargonium graveolens Harvest: June - July

2016 was a volatile period for geranium with prices and supply all over the place, and at times for no good reason. We’ve seen this before and we will no doubt see it again with local speculators able to control the markets when needed.

After the ups and downs of the past 12 months prices seem to have stabilised and supplies are coming through with no major concerns. At today’s price levels you would expect everyone from farmers to end users to be comfortable but as we know this can change very quickly.

If you’re considering buying you could look at the last 12 months monthly prices and say that today’s price is just about in the middle of the highs and lows we have witnessed.

Jasmine Absolute Jasminum grandiflorum L. Harvest: June - November

The markets were brought back into line after this year’s harvest as producers purchased smaller amounts of flowers to produce a lower quantity of oil. This was due to the fact that following a bumper 2016 crop and production, a surplus of oil still existed before the start of this year’s season.

Today the markets are stable and with just enough oil to see us through to the next season in June 2018.

Clary Sage Oil Salvia sclarea Harvest: June - July

The French producers have been investing heavily in their clary sage growing areas over the past few years and with it we have seen a significant increase in production.

If we look back a few year’s we can see a 3-fold jump in oil volumes, from 10 MT in 2015, 18 MT in 2016 and a figure of around 30 MT this year!  We now believe there to be around 2,000 hectares of clary sage plantations in the areas surrounding Provence.

It will be interesting to see if the market absorbs these volumes as their quality is different from the Russian and Chinese origins and less favoured in some market segments. That said, the increase in volume has stabilised prices at lower levels, which is sure to attract new users.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Coriander Seed Oil Corriandrum sativum L. Harvest: July - August

A new product for the region with production slowly growing in line with new interests from niche markets. Whilst dwarfed by comparison with other producing countries, the French continue to invest in new plantations, increasing the growing area to 200 hectares in 2017. This should increase to 300 hectares in 2018.

It yields limited oil volumes but has sparked some interest from end-users looking for an alternative source for their coriander needs.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Cypress Oil Cupressus sempervirens L. Harvest: All Year

No change of late. The markets are stable with good supplies at origin. This is not expected to change any time soon.

Helichrysum Oil Helichrysum italicum Harvest: July - August

There was a good harvest in July with the South Eastern regions of France producing almost 500 kilo of oil. This is a marked increase on last year’s 200 kilo and 2015’s 80 kilo!

Whilst the French producers would claim their oil is better than the more traditional Croatian type the Croatians would probably say the same for their oil. With the increase in production in both growing areas there is a general expectation that prices will soften but be cautious with this. Demand is growing in the aromatherapy market and given the cost of production, due to small yields, producers will be reluctant to see prices slide and will instead perhaps wait for the markets to catch up with their new demands rather than sell cheaply.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Lavandin Abrialis Lavandula hybrida var. abrialis Harvest: July - August

Reflecting on recent years, we can see little future for this variety as year-on-year output declines. 2015 production was down a further 15% on 2014. 2016 was down another 11% and now there is a maximum of 700 hectares of plantations still in existence for this year’s production, which will yield no more than 15 MT.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Lavandin Grosso Lavandula hybrida var. grosso Harvest: July - August

2017 production was down around 15% on 2016 due to many plants being killed in an extreme drought experienced in the months leading to harvest. This will also have an impact in 2018 as replanting needs to be established in many parts. It is estimated that total production will be around 1,200 MT.

The market has been aware of this issue for a couple of months and given the issues surrounding the global condition of lavender there is no doubt that farmers and co-operatives will try and increase prices on all major contracts by around 5-10% (or €2.00 /kilo).
The decrease in production comes at a time when demands will be naturally higher, which tends to occur when the lavender markets get difficult because lavandin is a good substitute in some applications. With this in mind, expect traded prices to increase over the coming few months.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Lavandin Super Lavandula hybrida var. super Harvest: July - August

2017 production was no more than 25 MT, which represents a continued year-on-year decline with 2016 production estimated to be closer to 30 MT. This was a result of damaged crops due to the droughts hitting the area since Spring. Prices for this ‘Super’ type have risen on the back of lower supply, which may in itself cause long-term damage to its usability as end-users are tempted to reformulate to other lavandin or lavender types.

Watch our latest video ‘Essence of Provence‘ filmed during this year’s harvest period.

Amyris Oil Amyris balsamifera Harvest: All Year

Total production this year could be as little as half of that of recent years as raw material supplies remain scarce and much of what is available is of low quality. Deforestation across Haiti is the main cause for concern with the only known supplies of Amyris in deeply remote and inaccessible areas. There have been signs in recent weeks that one processor has been able to secure some reasonable wood stocks and with this we may start to see some new oil starting to flow in the last quarter, although it’s unlikely this will bring any price relief in the short term.

Black Pepper Oil Piper nigrum L. Harvest: December - February

Today the pepper market is stable with supplies at origin well equipped to support the market. The new season started in January and continues to be recorded as a healthy situation. Prices are expected to remain stable at today’s current levels.

Cornmint Oil Mentha arvensis Harvest: May - July

The growing conditions continue to adjust to the changing market, which has seen demand drop significantly over recent years due to the introduction of alternative ingredients. The past few years has seen the managed reduction in planted areas that will continue during 2017 with 20% fewer growing areas than in 2016. That will bring the total growing area since 2014 down by over 50%.

Davana Oil Artemisia Pallens Harvest: February - April

Production this year has been signi cantly better than last with a reported increase of 3 MT oil available. This increase from 4 MT to 7 MT has certainly given the market some needed relief after a period of instability. Qualities still vary and with this prices. For the higher 47-50% davanone material you can still expect to pay a 10% premium on other o ers. Next crop March 2018.

Lemongrass Oil Cymbopogon citratus Harvest: July - November

There are mixed reports from India depending on whom you consult and how successful they are in obtaining raw material. It also depends on the quality required, as there is a growing gap between the better qualities and the standard qualities offered.
Overall the market seems finely balanced with no alarming shortage in supply, yet no surplus stocks to help ease prices. It seems that it is difficult for those involved with this oil to give any clear picture or provide long-term supply agreements, which casts some doubt as to how volatile the market is. For now, supplies remain thin and there’s a growing concern that prices will rise during the later part of 2017.

Palmarosa Oil Cymbopogon martini Harvest: January - June

Despite some weak demands in the first part of the year, prices have remained firm following a poor 2016 crop and no carry over supplies into 2017. As the months passed prices have firmed as buyers return to the market to find little or no material available. Prices continue to increase and may do so further despite fresh material expected late September. The crop isn’t expected to be good due to a lack of monsoon rains in the growing regions for the past 8 months. Don’t expect any improvements soon.

Peppermint Oil Mentha piperita Harvest: April - July

Despite fresh material coming online since June, stocks at origin remain low as planting is down 70% on 2016. This has put a little price pressure on what stocks are available.

Production in 2016 was thought to be around 500 MT and this year closer to 200 MT from fewer plantings.

Spearmint Oil Mentha spicata Harvest: July - August

Spearmint follows a similar pattern to all other mints with significantly less planting of around 60% this year! 

Over the past couple of years there has been a good carry over in each year’s starting stocks, which has kept markets over supplied and very weak.

There was around 120 MT produced in 2016, and this has dropped to 50 MT this year. In theory, this is where many see the size of demand in today’s market, a far cry from the 250+ MT produced just a few years ago!

Cajeput Oil Melaleuca cajuputi Harvest: All Year

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 Oil Cananga odorata Harvest: June - August

Supplies are generally slow and have been consistently slow for some time. As a result, prices have remained firm with the market generally accepting these new price levels. At times, quality lacks consistency so some caution needs to be applied when evaluating any seemingly inexpensive offers. At this stage, we do not anticipate any major changes over the next few months. Some shipments are leaving Indonesia not correctly classified as Dangerous Goods. This is giving some exporters a $6-8 /kilo price advantage.

Citronella Oil Cymbopogon winterianus Harvest: October - February

Heavy and persistent rains have severely affected local prices and supplies. Export markets are somewhat secondary compared with domestic demand for this essential oil, so locally there is no interest in comparing Indonesia’s performance on the export market with prices from other origins, such as China. Instead there is much anguish that local prices are where they are and, more to the point, the available supplies are as low as they are.  Local prices have increased around 30% since the start of the year and this is unlikely to change until the rain stops and a drier period has set in for some weeks.

Clove Oil Eugenia caryophyllata Harvest: May - September

Hopefully you’ve been keeping on top of our reports since late last year when we envisaged the ‘perfect storm’ when it came to longer-term raw material supplies as the situation certainly developed this way. You can read about the global market conditions in this market report but in Indonesia the prolonged heavy rains during the first half of the year slowed down collections and over time depleted stocks. As we entered the second half of the year we had hoped for an earlier dry season but this did not happen. In fact, as late as the end of August, Sulawesi was still suffering from heavy rains with no end in sight. Hopefully there will be a short window of dryer conditions between now and the next rainy season set to start in November but already it will not be a long enough period to bring any real relief in supplies.

Locally prices are rising every week as processors scramble for stocks to meet their obligations. Many tell us they are already oversupplied and are reluctant to offer any new quotations for Q4 business.

As a result, we expect supplies to remain difficult and prices to continue to rise for the foreseeable future.

Read more about the background to these current clove issues here.

Ginger Oil Fresh Zingiber officinale Harvest: January - May

Prices increased around 25% earlier this year as market supply and demand seemed to rebalance after an increase in demand during 2016.

In recent months, prices have remained steady as most feel comfortable with today’s price levels and no real change in expected any time soon.

Mace Oil Myristica fragrans Harvest: March - April, October - November

Mace supplies have been steady despite the ups and downs of nutmeg supply. No real change is expected in the foreseeable future.

Massoia Bark Oil Cryptocaria massoia Harvest: September - May

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 Oil Myristica fragrans Houtt. Harvest: All Year

Markets have settled in recent weeks as supply and demand seem well balanced. Generally, all those involved in the product feel prices around today’s level represent a fair return for all, but unfortunately the market is more delicately balanced than it seems on the surface.

With little oil stocks in the supply chain, it is still difficult to secure large volumes or get commitment from processors for any date too far into the future. Collections have remained low all year not helped by the wet conditions and only a short-term drop in market demand has kept prices stable in recent weeks. It is feared that when demand returns this extra pressure on the supply chain could start the process of prices increasing once again, so our advice would be to cover your next 6 month requirements at these manageable levels.

Patchouli Oil Pogostemon cablin Harvest: All Year

The market has remained weak for some time now with most realistic buyers and producers realising prices are at rock bottom. There is hardly another dollar to be squeezed out of the supply chain with all involved already trimming margins to fight for new business. It is no doubt a buyers market at the moment and with supplies looking still in abundance there is little sign that this will change in the near future.

Whilst pleasing for some (end-users in particular) this situation does not encourage a sustainable future for supplies, as many farmers are likely to get discouraged over time to continue to produce with lower and lower returns. When this happens it could start to change the supply and demand balance and with it prices.

August and September are traditionally a good time to buy as supplies start to pick up at the beginning of the dry season. This year, with prices already at the bottom, we are not seeing the same benefits but buyers should be confident to keep healthy inventories at these price levels as the product only gets better with age and prices are unlikely to reduce further.

The general market aside there are a number of encouraging sustainability projects in place across Sulawesi, which aim to bring stability to particular areas of the market with an emphasis on supporting local communities. A number of multinationals and brand owners have endorsed this and Van Aroma are also heavily involved. These projects show a real value to everyone involved, ensuring the future is secure. This sort of transparent relationship among brand owners (or end-users), the processors, the collectors, the farmers and the local communities brings confidence to everyone in what historically can be a volatile market.

Vetiver Oil Vetiveria zizanioides Harvest: January - July

The qualities and quantities of supplies remain challenging with no real changes seen over the past 6 months or expected in the coming 6 months.

With little availability we are also seeing some producers over heating the oil during the distillation process to shorten the distillation time, but in doing so they are burning the oil. This then affects the colour and the odour, which have not been acceptable for many end-users.

Whilst the education process continues alongside longer-term investments the situation is likely to remain critical for some time.

Bergamot Oil Citrus bergamia Harvest: November - March

As with other Italian citrus crops, bergamot has been badly affected by the extreme weather conditions over the winter period, which damaged or destroyed much of the crop. Different producers are citing different figures but all are consistently in the region of 50-60% loss of fruits!

During the course of the closed season, prices have tended to firm but the reality is there is little or no material to speak of and with the new season still a few months away (November to February) this situation isn’t going to change quickly.

With demand growing, even a good 2017/18 season is unlikely to improve the market conditions significantly. Recent production has been no more the 30 MT in a market that used to produce and consume 65 -70 MT. Those with real demands need to strategically plan this one.

Lemon Oil Citrus limon (L.) Burm. F. Harvest: November - January, April - July

It was supposed to be a reasonable lemon season in Italy but the harsh winter conditions had a severe negative impact. It has been a difficult few years for the Italian lemon industry, reflected in the year-on-year increase in imports to supplement the gaps in Italian production.

The 2015/16 production was poor so there was hope of some improvements for the 2016/17 campaign but this never happened. While not as bad as for other citrus fruit, the poor winter conditions destroyed an estimated 20% of the lemon fruit, which directly impacted on the volumes available for processors.

That’s two poor campaigns in a row for the Italians and with no current carry over supplies, and a long wait for the new season crop, then prices will only firm in the coming months.

Mandarin Oil Green Citrus reticulata Harvest: February - May

The crop ended with disappointing results and today there are few stocks available after most production was taken for existing contracts.

The 2016/17 crop was similar to that of 2015 which itself was 15% lower than 2014. About 10,000 MT of fruit went for processing.

These long running low outputs continue to put stress on the market where demand is certainly consistently higher than supply.

Orange Oil Blood Citrus sinensis Harvest: December - February

Italy is the second largest European orange producer after Spain. Sicily and Calabria are the main orange-producing areas, accounting for 59 and 22 percent of total production, respectively. Tarocco, Moro, Sanguinello, Naveline, and Valencia are the leading orange varieties grown in the country.

It has been a terrible period for orange production in Italy as rain and hailstorms earlier in the year damaged or destroyed ripening fruits to the extent that many have described it as the worst crop in memory.  Total fruits for processing were down as much as 50% by March with hardly any fresh deliveries expected in April, marking the close of the bad campaign.

Prices of fresh fruits and oil are impossible to quantify at the moment as there’s either simply too little stock to talk about or there’s too much speculation on price with significantly more demand than available product.

An article in Food News summarised the organic crop situation as follows:

“Furthermore, it has not been possible to process any quantities of organic blood oranges this season. Unprotected by any agrochemicals, the climatic conditions have resulted in a total loss of the organic blood orange crop this year.”

ISTAT (Italian Institute of Statistics) forecast total fruit supplies to be 40% lower than the previous season with the total amount of fruits processed down around 35%.

Hopefully there will be some recovery in the 2017/18 season but with the new campaign not set to start until October it is too early to report.

Lemon Oil Citrus limon (L.) Harvest: August - November

There have been some significant investments in lemon plantations across Mexico in recent years and volumes are increasing.

The season runs from August to November and the 2017 season is expected to be good. The main growing area is Tamaulipas with around 10,000 hectares of plantations with each hectare yielding 15 MT of fruit.

One important factor in longer term investment in Mexican lemon is that, unlike most citrus markets around the world, half of the plantations are owned by processors so there is more control over supplies and less influence from the fresh fruit market.

Further investments have taken place during the first half of 2017 with the first of the new season material expected soon.

Lime Oil Distilled (Key) Citrus aurantifolia Harvest: May - August

2017 has been difficult for Mexican lime producers. The winter crop ending in February was small as producers scaled back production due to a lack of demand and healthy carry over supplies from 2016. That was unfortunate as the summer season has proved more challenging than anyone would have expected.

It is forecast that there will be a 22% reduction in fresh fruits (half a million tons less) with the processed market badly affected as their share has fallen to just 12% of production with the fresh fruit market being the preferred choice for most sales, both domestically and for export. By the end of the season no more than 220 MT of Key Lime Oil is expected to be produced, 37% less than a normal season.

The growing global demand for fresh fruits continues to be the biggest challenge for lime processors in Mexico.

Whilst this impact isn’t felt today it is likely that later in the year the market will realise there will not be enough material to see us through until the next season and at this point prices could firm. With this in mind, consumers are encouraged the take a position sooner rather than later.

Although Key Lime production is year round, production in Michoacán targets the winter season (October to February), while production in Colima covers demand from May through September.

Artemisia Taurica Artemisia taurica Harvest: July - September

Hot weather conditions locally have all but decimated this year’s plantations with very little oil expected as a result.

Overall supplies also suffered in 2016 as there was a reduction in harvested areas with some areas difficult to reach in the south and southeast areas of Ukraine.

Supplies remain limited for this thujone rich product so the advice is to cover quickly to ensure you have material.

Clary Sage Oil Salvia sclarea L. Harvest: July - August

The 2017 clary sage harvest began and ended in July and delivered some reasonable results with slightly more oil produced this year when compared to last. That said, most oil has already been committed as market demands increase and have a preference for the Russian quality over the French and Chinese. With this in mind, prices have remained similar to those of last year despite global production increasing.

Coriander Herb Oil Coriandrum sativum L. Harvest: May - June

The 2017 season started and ended in June with reasonable volumes produced against forward orders. With some 2016 carry over stocks still visible in the market, demand was slightly weaker this year. For those who don’t buy season to season, you should find enough material at origin to satisfy any off-season demands.

Coriander Seed Oil Corriandrum sativum L. Harvest: July - August

We started 2017 with some of the lowest oil prices seen for 10 years – a stark contrast to recent times. It’s almost impossible to justify these prices as given the maths they appear unsustainable and this may be a factor during 2017.

These low prices are a result of surplus seeds stocks existing as we approached the last winter period so farmers and collectors were keen to offload them, almost at any price. This gave the processors a chance to produce cheaper oil but at the same time take a risk, as market demand was also weak.

Seeds don’t store well but oil can be stored without too many concerns, so in some ways it made economic sense to produce stock even given the weak demand. However, it may have set an unhealthily expectation with buyers who will be expecting more of the same this year.

But this may not be the case as every season is different and demand from the spice market appears to be returning, giving farmers a welcome boost and processors a new challenge as they may need to pay that little bit more for their seeds!

Some ‘traders’ had reported recently that the total growing areas had been reduced by 30% due to the low prices of seed discouraging farmers from maintaining their plantations – this is not true! In fact, the total growing areas grew during 2017, but whilst this means more seeds the hot weather has created a loss of oil yield. Therefore, to get the same amount of oil you need more seeds. Even if the price of seeds remains the same the oil production costs will higher which may lead to some higher prices. Seed prices would actually have to fall to compensate for this yield loss and that’s not likely to happen.

Early new season oil prices look comparable to those of last season but you may start to see some price increases during Q4 as processors are unlikely to buy surplus seeds if oil yields are poor. This could mean fewer inventories at origin and a tightening of supply over the winter period. The advice would be to top up your stocks sooner rather than later.

Dill Weed Oil Anethum graveolens L. Harvest: July - September

The market was in healthily balance after a good 2016 season, which saw production increase on the back of near perfect conditions and demand also increase, leaving everyone happy. The 2017 crop wasn’t as rich as the 2016 crop, as we couldn’t count on the same perfect conditions, but in general it has been OK with production estimated to be around 45-50 MT. Prices remain stable, but we need to keep an eye on that growth rate in case it continues to develop at the same rate as it has over the past 12-18 months.

Lavender Oil Lavandula angustifolia Harvest: July - August

There are only a handful of plantations left in the region that continue to be harvested for oil. Year-on-year we have seen a decline in production with little or no real investment in new plantations for some time. Most of what is produced is generally consumed domestically for the tourist markets and local aromatherapy brands.

This year’s production was completed late July with just several tons of oil produced. Elsewhere locally in Ukraine there were another several tons produced of what is considered to be the same quality as over the border in Russia. It is understood most of this has already been sold.

Limited options remain for anyone interested.

Rosemary Oil Rosmarinus officinalis Harvest: All Year

The 2017 season started late March and finished early August. After a challenging couple of years supplies are once again healthier and with this we’re seeing some softening in prices.

Basil Oil Linalool Ocimum basilicum L Harvest: August - September

There was no carry over supplies into this season which started in August. Whilst trying to be optimistic about the crop sizes there is a realisation that volumes may be down on 2016 due to the recent floods throughout the Terai Plains, which has led to some uprooting. With growing demand we may see prices rise later in the year if supply becomes tight.

Blue Chamomile Oil Matricaria chamomilla (L.) Harvest: December - February

This year’s February crop was reasonable, with output a little higher than last year due to some new plantings that have yielded additional volumes. In total the Nepalese crop was around 1,000 kilo. Today supplies are fair and it is hoped the market will remain satisfied until the New Year when the next season will begin.

Manuka Oil Leptospermum scoparium Harvest: April - October

As the market grows more aware of the amazing benefits of this oil, new applications and new aromatherapy brands are helping to significantly increase demand. Surplus stocks, which had been accumulated to support such growth, have been depleted in recent months with pressure now back on the supply chain. It is expected that demand will increase once the success of other brands and new products are realised and copied by others. However, activities in its native New Zealand should help support this growth long-term even if in the coming months there are a few minor delays in supply.

Download the new Australian Essential Oils Guide by Golden Grove Naturals here.

Neroli Oil Citrus aurantium Harvest: April - May

The 2017 season started and ended in April with just about all stocks at origin now sold. This is not unusual for this product as buyers are usually waiting for each new crop to start. Whilst many won’t give accurate numbers it is understood that there was some recovery in overall production this year compared with the 35% drop in yields in 2016 over 2015. That said, of the 900 kilos thought to have been produced this year, half of this may have been blended with 30% sweet orange flowers. In which case the true production was closer to 750 kilo.

Cabreuva Oil Myrocarpus frondosus Harvest: All Year

There is a real shortage in supplies with limited availability each month. Some months when demand is low there isn’t a great problem but in other months when there is some demand there is almost a crisis. Supplies won’t improve in the foreseeable future so pricing and availability will be all down to market demand.

Guaiacwood Oil Bulnesia Sarmientoi Harvest: All Year

Production continues to improve with good stocks now available at origin. This should remain in place for the foreseeable future.

Petitgrain Oil Citrus aurantium ssp. Harvest: All Year

October marks the start of the new season and it will be a welcome arrival for many. Prices have remained firm but stable over the past few months as the off-season tries to manage the ongoing demands whilst production is weak. Last year this became a major problem, as global demand seemed to grow around 20% and a backlog in supply occurred which was only rectified by the end of the season, which runs until March. It is hoped that this year the 5 month season runs with no real issues and covers the market for the next 12 months. That said, expect prices to remain where they are as it’s likely to be a seller’s market, not a buyer’s one!

Vetiver Oil Vetiveria zizanioides Harvest: February - May

Heavy rains and flooding hampered harvesting efforts earlier this year forcing some producers to close their facilities for several month as little or only high priced raw materials became available. This has improved a little in the past couple of months but with the rainy season already started we expect to see continued pressure on supply and with it prices.

Lime Oil Citrus aurantifolia Harvest: January - April

Climatically not many have had it worse than Peru recently.  Early in the year you could have referenced Peru’s severe 2016 droughts as a primary source of concern when it came to their citrus crop as a lack of rain saw fruit less mature at a critical time of the campaign.

These droughts were then followed by some of the worse rains on record as a result of El Niño.

The region of Piura, the largest production region for limes, was the most affected by the Coastal Nino. The region accounts for 57% of the country’s production. Other major production areas include Lambayeque (19%) and Tumbes (5.8%). The remaining regions have a smaller share of 13.7%.

Over the past months, there has been a shortage of fresh limes in the region with prices rising as much as 105% in June! Fresh fruit prices are expected to rise further in August and September, as production is low until the new season starts in October.  Today there are no fresh offers for oil.

Fir Needle Oil Abies sibirica Ledeb. Harvest: April - September

It took a while to rectify but eventually, after months of the 2017 season, we have seen prices come back to slightly more tolerable levels, after shortages in supply last year saw them jump significantly. The higher prices during 2016 have encouraged the producers of the Taiga (Siberia) region to harvest more and as a result supplies have improved.

That said, for this time of year there aren’t large amounts of inventory at origin and the question will be if there’s enough to meet demand during the winter period. It could be that during this time prices start to rise again. Always better to buy from Siberia in the summer months as ‘winter is coming’!

Eucalyptus Oil Citriodora Eucalyptus citriodora Harvest: June - October

South Africa has become more active in this essential oil and is now well positioned to compete in the global arena against Brazil and China.

Better-managed farms and sustainable planting allow an offering of around 20 MT per season and with the season starting earlier than China, this offers a small edge when it comes to supply.

The 2017 season starts in June and runs until October. Currently some supplies remain from the 2016 season with a citronellol content above 80% and at an attractive price.

Eucalyptus Oil Radiata Eucalyptus Radiata Harvest: August - October

There continues to be a growing global demand and what feels like falling production from South Africa and other producing countries. Batch sizes are small and do little to fill the amount of enquiries. That said, efforts have been long under way in South Africa to improve this and ‘significant plantings’ should start to yield some results by 2018. How we continue to fill the gaps during 2017 is a challenge as no other eucalypt offers the same ‘safe’ values as E. radiata, which is lower in cineol than other varieties.

Lemon Oil Citrus limon (L.) Burm. F. Harvest: July - September

Fresh lemon production is predicted to increase by 15% to 355,000 MT in the 2016/17 MY, based on increases in area planted and normal rainfall levels in the main growing regions of the Eastern Cape and Limpopo. This is according to the USDA. These increases were partially offset by the mysterious fruit drop experienced in the Eastern Cape and, according to some data, will be consumed by the growing export demand for fresh fruit.

If we subtract the total amount of domestic and exported fresh fruit from total production it will once again leave only a limited amount of fruit for processing. Over the past few years this has been around 80,000 – 85,000 MT of which unofficial data suggest less than half goes for oil processing.

Currently, there is a drought in the Western Cape growing region but according to the USDA this is only expected to impact 2017/18 MY citrus production if insufficient winter rainfall is received in 2017.

After some initial delays to the start of the campaign the first new season shipments are expected from early September.  Overall we expect to see some small improvements in oil supply when compared to last year’s losses but nothing to suggest we will get back to the previous volumes of 2015/16.

Orange Oil CP Citrus sinensis Harvest: June - September

Last year wasn’t the best for South African citrus growers as drought conditions throughout 2016 and a lack of spring rains (September to November) reduced output significantly – in some parts by as much as 30%. Overall the story was more mixed with some new plantations coming online to compensate for losses elsewhere but the official story tells us overall production was down 5%.

The bigger concern moving forward is the reduction in planted areas as many growers switch to soft citrus (tangerines, mandarins etc.) as export prices and demand yield better returns for farmers.

The 2017 season kicked off later than usual around July and expectations are for a slightly improved year compared to 2016

Local estimates are that the production of oranges will increase by 5% to 1.34 million MT in the 2016/17 MY, from 1.28 million MT in the 2015/16 MY, based on the recovery from the 2016 drought and normal rains received in 2017 in the main growing regions of Limpopo, Eastern Cape and Mpumalanga, which account for about 82% of the total orange production. The current drought in the Western Cape growing region, which accounts for 15% of the total orange production is only expected to impact the 2017/18 MY crop if insufficient winter rainfall is received in the second half of 2017.

Overall local fresh fruit prices have increased 50% in the past 12 months and it is expected that there will be 10% more fruit available for processing in 2017 versus 2016, but still less than half it was in 2015

Tagette Oil Tagetes erecta Harvest: June - August

The 2017 season resulted in the same positive vain as last year with favourable conditions resulting in a good yield. Rains at the correct times early this year helped the case and growers are more positive as demand seems to have returned to a healthier state.

Tea Tree Oil Melaleuca alternifolia Harvest: October - January

Year-on-year South Africa continues to build momentum in its efforts to compete on the international stage for tea tree oil. It is fair to say that historically the South African material has had a stigma attached to it that due to the growing conditions and the average age of the plants the oil is somewhat different from the Australia standard. I think today we can dispel that myth as time and time again analytical results show it is identical to its Australian counterpart.

What is different is the harvesting methods as the South African tea tree is generally hand harvested (not mechanical) making most farms a community project as the process is very labour intensive. This adds cost even in an area with relatively cheap labour and many farms are also organic and can offer Fair Trade product, bringing many good marketing opportunities for end users and brand owners.

Their season runs during Australia’s closed season (October to April) which can be both advantageous or problematic for the South African producers depending on the sort of season Australia has had and the market demands thereafter. Their last season posted some positive results with volumes increasing once again.

Representing around 15% of the global market, with about 140 MT (organic and conventional qualities), South African producers aren’t the main influencers in this market but can certainly offer a point of difference when needed and with plans to expand significantly over the next 3 years it may be more of simple commercial decision for buyers in the future!

Grapefruit Oil Pink Citrus paradisi Harvest: December - April

South Africa’s total growing areas increased 6% over the past 12 months increasing to 7,600 ha. This positive news follows a downward trend over the past couple of years.

According to USDA figures, 2017 will see a production of 363,000 MT fresh fruits with 5,000 MT thought to be consumed domestically, 234,000 MT exported and 124,000 MT processed. This is an increase of 15% on last year’s total fresh fruit production figures. The increase in production is thought to aid the export of fresh fruits rather than additional volumes for processing as demand for juice hasn’t grown and without the juice market there will be no additional oil production either. Prices locally for fresh fruits have increased 35% in the past 12 months.

About 75% of the grapefruit in South Africa is produced in the Limpopo and Mpumalanga regions. With the season running from April to September, fresh oil supplies become available around July once the bulk of export markets for fresh fruit has been satisfied.

We have seen some fresh oil supply enter the market in recent months but it is limited. Whilst welcome for those who do buy this quality it has little impact on the overall global market, which remains extremely firm.

Lavandin Grosso Lavandula hybrida Harvest: July - August

The Spanish have been planting more and will look to grow production in 2017 (August crop) challenging the French producers by increasing capacity and offering at more competitive prices. Fighting talk from the Spanish! The reality is that they will not produce anything near what the French produce but they could look to fill the gaps the French leave if they’re to have a less than satisfactory season, as in the past two years when French production was 120 MT short.

The new season started well but at the time of writing it is a little early to estimate final numbers.

Lavandin Super Lavandula hybrida Harvest: August - September

The market in the months leading up to August’s harvest has been fairly flat with some carry over stocks still remaining from the 2016 season, when around 20 MT was produced.

It is expected that demand may increase, given the poor lavender seasons many are experiencing, and at the time of writing the outlook for this season’s crop was thought to be reasonable. More will be known by late September.

Lemon Oil Citrus limon (L.) Burm. F. Harvest: November - July

The first harvest estimate for the 2017/2018 campaign by the Lemon Interprofesional Organization (AILIMPO) predicts Spanish lemon production at 1,080,000 tonnes. This is a very similar figure to that reached in the current campaign, which will come to an end in late August, with approximately 1,090,000 tonnes of lemons harvested. This is an increased output of 100,000 MT compared with the one previously cited throughout the current campaign by all the official bodies. This is due to an extended season and additional fruits per tree, with the last of the fruits collected by the end of July.

It has been a good season for the Spanish processors who have seen a constant demand for their products since the start of 2017. There had been a good balance in the market until June when as the season drew to a close, a peak in demand returned on the back of worrying news from Argentina of a troubled season ahead. This put a late surge in demand and with it prices started to increase.

It is likely that during the off season we will see prices continue to firm unless demand falls or Argentina provides a better forecast and pricing than we have seen in recent weeks.

Although the new season will start in November, it it unusual to see much oil hit the market before Christmas, which given the current global conditions, seems a very long way away!

Orange Oil CP Citrus sinensis Harvest: October - May

The 2016/17 Spanish orange season was ultimately better than expected. After a slow start to the campaign, due to poor weather in December and January, the season recovered to see growth levels close to 20% when compared to 2015/16.

The main Spanish orange producing areas are the regions of Valencia, Andalusia, and Murcia with an expected increase in orange production for MY 2016/17 of 19%, 17.3% and 18% respectively.

Naveline, Navel, Navelate, Salustiane, Valencia and Sanguinello are the leading orange varieties grown in Spain. Oranges are grown with the objective of being consumed fresh with 4 oranges of the Navel group being the most valued in the local market, especially Naveline and Navelate. Valencia late varieties have a brighter colour, and are more appropriate for juice.

Current global essential oil conditions aside, there has been a continuous contraction in the Spanish orange industry over the past 5 years as poor returns have caused many Valencian growers (which are better for juice and oil processing) to pull up many orange groves in favour of other more profitable plants.  In Valencia we have seen a decrease of almost 3,500 ha of orange production in the past 5 years. A trend we may see continue.

Today there is little oil available with the new campaign set to start in October.

Rosemary Oil Rosmarinus officinalis Harvest: February - June

Supplies have improved slightly aided by other growing countries also improving their contributions. As a result prices have relaxed a little but still remain firm.

Thyme Oil Red Thymus vulgaris Harvest: June - August

The 2017 crop started in June and ended in early July and was considered by some to be much improved on previous years after significant new plantings yielded their first results. Today, there is less pressure in the market than we have recently experienced and with this some small softening in prices.

Cinnamon Bark Oil Cinnamomum zeylanicum Harvest: May - December

Market demand is very strong at the moment and raw material is limited resulting in some price pressures. These are expected to continue into the foreseeable future.

Cinnamon Leaf Oil Cinnamomum zeylanicum Harvest: March - August

The season started late May and will end in December so you would usually expect good supplies this time of the year. Unfortunately, due to huge droughts in the area, collections have been slow and stocks of oil are low.

Whilst demand has been weaker of late it is expected to come back and when it does there will no doubt be pressure on supplies.

Rosemary Oil Rosmarinus officinalis Harvest: All Year

The 2017 season started late March and finished early August. After a challenging couple of years supplies are once again healthier and with this we’re seeing some softening in prices.

Oregano Oil Origanum vulgare Harvest: July - September

The 2017 crop was considered good and similar to last which was itself up by 20% on 2015. Today, the market is stable with no real changes to be expected during this year. Prices vary depending on the carvacrol content and are around the same level as the same time last year.

Grapefruit Oil Citrus paradisi Harvest: December - April

The shortages continue as the well documented effects of citrus greening continue to have a severe negative impact on supply.

The final 2016/17 season finished well below earlier season forecasts at 7.8 million boxes (1.5 million Red and 6.3 million White) down over 35% on the previous year, which itself was down 25% on 2014/15 – you see the pattern?

This is not a trend that will change quickly as the number of fruit bearing trees continues to decline.

This is reflected in the processed markets, where oil prices continue to rise, without any signs of stopping with the greater pressure being on white oil.

The net effect of this season will make the history books headline ‘the worst season since the early 1930s!’ 

The first estimates for the 2017/18 season will be released by the USDA 12^th October. This will give us the first insight as to what we may expect for the months ahead.

**We are awaiting to hear official news of the impact of Hurricane Irma from mid-September as to the potential crop loss but here’s what may be in store**

Lemon Oil Citrus limon (L.) Burm. F. Harvest: May - July

Californian lemon growers have filed a suit against the US Department of Agriculture (USDA) over its recent ruling to allow lemon imports from Argentina. In a press release, the US Citrus Science Council, which represents the majority of the state’s growers, said the move exposes US citrus growers to the possible introduction of invasive pests and plant disease.

In December the USDA announced that it would end its 16-year ban on Argentinian lemon imports.

There are some reasonable grounds for this concern, not only for the obvious increase in competition but also to prevent the possible introduction of HLB (Citrus Greening) as California continues to be on high alert for the disease, which has almost decimated the Florida citrus industry in recent years.

As recently as late July did the CDFA (California Department of Food and Agriculture) confirmed the detection of Huanglongbing (HLB) in Riverside County. The disease was detected in plant material taken from a grapefruit tree in a residential neighbourhood in the city of Riverside near I-215. According to the Citrus Pest and Disease Prevention Program, the infected tree has been removed and agriculture officials are moving swiftly on mandatory surveying in an 800-metre area.

This is just one case hitting a residential area but farmers will be concerned of any threat, like imports from other countries, impacting the $2.5 billion worth of citrus trees in California.

Production across the USA for the 2016/17 season is expected to close at the same, or similar levels to those of last year.  Today there is a lack of availability for oil, with most of the traded oil being Argentinian quality.

Orange Oil Citrus sinensis Harvest: February - May

You can see from our article on Brazilian Orange the contribution (or lack of it) the production in Florida has these days. Year-on-year we see a reduction of fruit bearing tree and with it fresh orange production and processing numbers.

The season ended close to 20% down on previous years, which was the lowest since 1963/4.

All in all, the picture remains unchanged with the devastating effects of the past few years really becoming the new reality. Citrus greening, it seems, has irrevocably changed the citrus industry in Florida, although we all hope new research can make some contribution soon towards rebuilding this depleted market.

The new season is still a couple of months away and fresh figures will be released by the USDA in mid-October. From here we can start to talk about future supplies but for today there are simply none to talk about.

**We are awaiting to hear official news of the impact of Hurricane Irma from mid-September as to the potential crop loss but here’s what may be in store**

Basil Oil Methyl Chavicol Ocimum basilicum L Harvest: August - September

This year’s crop will be down significantly as a large proportion of crops were destroyed during ‘Severe Tropical Storm Talas’ which hit the region mid-July. Harvesting usually takes place between September and December but may be a little late starting this year.

In a usual year, Vietnam produces 25-30 MT. It is feared that figure could be halved this year. With low stocks in the market, prices have already firmed 30-40% in recent months, with further increases likely depending on the final results of the crop.