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Market Update : July 2015

Eucalyptus Oil Globulus - Prices have remained firm in China since June. Reports in China blame increased labour costs on rising prices and decreased production. Historically, prices tend to ease in Q4, but that will depend on supply and demand through the summer months. European stocks have been considerably smaller than usual, mainly due to dealers/stockists anticipating better prices and holding off from purchasing.  Spot Europe prices are quoted in excess of USD 14/kg with limited availability.

Sandalwood Oil E.I - Prices have increased for most qualities..Australian, Indonesian, Pacific and although Indian Oil is firm, other origins seem to be moving faster. We currently have good access to competitively priced Indian Oil and recommend buyers taking advantage of this situation, especially if Indian prices re-align against Indonesia in the coming months.. 

Aniseed Oil / Anethol - The market remains attractive to buyers, whilst supply and demand keep pace. Currently there is no production in China and we understand that farmers / speculators are keen to push prices higher in the months ahead. We could find that prices move higher, but from Q4 new oil will enter the market, so the market is quite finely balanced. We recommend buyers taking cover at current levels.

Garlic Oil Chinese - Prices have increased constantly for some considerable time and it seems there is no ceiling for this product. Our biggest worry is quality. Many companies in China are shipping adulterated Garlic and finding 100% pure, Natural oil is quite a challenge! We don't see any improvements in the market in 2015. 

Wintergreen Oil Chinese - We continue to see supply problems in the market for this oil. Prices increased rapidly in 2014 and have remained high since. July is crop season in China, but we understand output is very small, so it's unlikely we will see any price advantage this year.  Our sources are suggesting higher prices in the second half of 2015. We are trying to locate good quality parcels, which can be a challenge..

Litsea Cubeba Oil Chinese - This product seems to have established a "base-level" around USD 18/kg CIF but has a trading range between USD 18-22 per kilo CIF. July / August is crop time in China, so depending how good a crop is expected will ultimately dictate where we expect prices to settle in the weeks ahead. We hope to see the market price test the lower end of the range in August / September.

Peppermint Oil Piperita - The market has been very active since mid June. Buyers entered the market for new crop oil at a time when production was struggling to keep pace, which resulted in a sharp upward movement in price, coupled with increased speculation (as usual). As we write, the market has calmed down and prices have started to ease a little from the highs of early July. We understand the menthofuran levels have been quite low this year, which has pushed prices even higher for Piperita with high menthofuran. We feel that prices could drift lower in the weeks ahead if buyers stay out of the market, but as with Peppermint Arvensis, the market will remain sensitive to any spike in demand. Buying on any dips is advisable.

Peppermint Oil Arvensis - We saw a steady increase in price throughout June - up around 10 - 15%. Heavy speculation on the infamous "MCX" pushed prices sharply higher, but we also hear reports of a reduced crop compared to last year by around 30 to 40%. It's always extremely hard to verify these claims on crop size, but until the speculation has cooled and the dust settled, it is probably wise to watch and wait. We would advise buyers not to take long forward positions at current prices as the market could be more attractive in August / September, during the traditional holiday period in Europe. Even with a smaller crop in 2015, output could still be sufficient to meet demand when taking last year's carry-over into account. Menthol Crystals have obviously moved higher, but Chinese exporters are currently offering more competitive prices than their Indian counterparts. This is a somewhat odd situation and appears to be blamed on very low internal demand for Menthol in China. We would expect prices to find an equilibrium soon and, most likely, for the Indian market to realign with Chinese. We advise buyers to operate in a similar fashion to Peppermint Arvensis and to monitor the market through to September.

Petitgrain Oil Paraguay - Serious supply issues have affected this product since 2014. Prices have increased considerably in the last 12 months. Early 2014 prices were quoted around USD 30-35 per kilo CFR, compared to today's price @ USD 60+/kg. Finding oil at these inflated levels is still almost impossible. We understood that there was good production between October 2014 and February 2015, but we assume that this material was already fully committed to long term contracts with large multi-nationals, so very little oil has been available since then. We have no indication from our suppliers when the supply position will improve, so we expect prices will remain high for the coming months.

Amyris Oil - There is currently little or no production in Haiti. Prices are starting to reflect the supply situation, and although demand in Europe hasn't been large, we expect prices to remain at current levels and possibly increase further. For available parcels, prices are quoted up to USD 55.00 per kilo, which is at least 20% than a year ago.

Bay Oil W.I. - Similar to the supply situation with Amyris, there is little or no production at present. We have access to very small quantities, so buyers should be aware and look to cover their needs. Prices are already 25-30% up in 2015 and we expect further difficulties in the weeks ahead.


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