At the time of writing, several major consumers of Orange Oil & Terpenes had their procurement teams in Brazil negotiating quantities and pricing for the remainder of 2016. Rumors indicate that pricing is still very firm. With offers from Brazil lacking, we expect prices to be firm through the end of 2016.
We have received a report that a major Chinese trading company has secured the majority of oil produced during December and January. This company has been releasing limited amounts of Eucalyptus every month, keeping prices high. Both frost damage and agricultural labor currently being devoted to food crops add to the expectation that the market will be firm for the foreseeable future.
One dealer states that pricing for fresh Garlic continues to rise, with pricing for bulbs not suitable for fresh, flakes or powder at over $0.90/kg. Most dealers state that prices will continue to climb for the balance of this year. Those processors that have been able to get permission to produce (those who have found acceptable solutions to pollution) are only doing so against firm orders.
We have received conflicting reports on Anise Oil. Some cite slow demand, farmers not interested in harvesting, factories not wanting to produce until carryover is gone. Others claim that the Spring crop is over and that some factories have raised pricing because it is too close to costs.
Yield on the Spring crop was off, causing both costs and prices to rise. Pricing is expected to be firm until the Autumn crop.
The most recent report of a major supplier indicates that the total crop for 2016 will be between 38000 & 40000 metric tons. These figures are based on surveys and discussions with others in the growing regions. Based on the limited distillation that has taken place, the supplier reports that yield per acre is down. Since the monsoons have not occurred, it is possible that the crop will be less than estimated. With a large portion of new oil set to reach the market by mid to end July, we would expect to see prices fall.
A small crop has helped to keep prices firm. This situation is likely to continue through the end of the year.
Several dealers have advised that the Chinese government has imposed new pollution controls on the production of Ginger Oil. Processors have changed their fuel from coal/biomass to gas. As the spent Ginger cannot be used as animal feed, a means of disposal needs to be found. These factors have contributed to the continuing rise in prices.
Prices on both products remain firm as carryover continues to diminish. We expect this to continue until mid-September when new oil will reach the market.
Major factories are expected to close for their traditional time period during the summer months. We have been advised that sufficient supplies have been stockpiled to last the summer. Pricing should be stable.
Rain in the growing region of Yunnan has curtailed production. Crop season begins in July, so we do not foresee any disruption as Indonesian Oil is readily available.
The 2016 US Peppermint and Spearmint Acreage report has been published. Total acreage for all Peppermint is estimated at 60,300 acres up from a total of 57,300 in 2015. Total acreage for Spearmint remains the same as 2015 at 26,800 acres. It is expected that prices for both products will ease from 2015 levels.
Over the years harvesting of the trees in Haiti has depleted the supply leading to ever increasing prices. Relief from other parts of the island of Hispaniola has been restricted by government regulations. Demand is expected to continue to outstrip supply causing prices to climb higher.
Part of the traditional growing regions in Tunisia are being used by the military as a base of operations to fight terrorists. This has led to a smaller crop. In Morocco, the crop has been diminished by bad weather. With strong demand for Rosemary leaves to produce antioxidants, prices have soared.
The Spice Trade is reporting delays in the crops from Brazil and Indonesia. Fresh Pepper from Indonesia is not expected to be exported before the end of July/early August. Delayed by El Niño, the crop in Southeastern Brazil is already late and is expected to be ready in September or October. Vietnamese dealers are advising that farmers and collectors are withholding product, waiting for prices to climb higher. With the Indian crop reportedly smaller than normal and little relief from Indonesia in the near future, prices are expected to increase.
Oil from Indonesia is extremely difficult as there appears to be very limited processing being done. In Haiti the crop is mostly over and supply is not meeting demand. Prices for both Vetiver Oils continue to climb.
The latest report from China states that Gum Resin prices softened the week of 6/13. In contrast, prices for Gum Turpentine rose during that period. The report states that while a small amount of Gum Resin has entered the market, there is no new Gum Turpentine. With downstream plants waiting for prices to fall, offers from producers have stayed firm. Additionally, labor in Yunnan has shifted to the tea harvest, limiting the supply available for tapping. If and when Gum Resin production returns to normal levels we would expect prices to soften from current levels.