Our Market Update on Essential Oil, Vegetable oil and Aroma Chemicals.

November 30, 2017

Our Market Update on Essential Oil, Vegetable oil and Aroma Chemicals.

Keeping you up to date on the latest price increases across the essential oil market

With poor conditions a main factor in the crop shortage across the industry. We have a few updates on some of the more popular products that have experienced a market price increase.

Market report India and essential oils - Aromatic Ingredients

The introduction of GST from the 1st of July is causing an issue with pricing and supply from India, the export levy is 18% on all exports with an expectation of a refund once the export documentation has been supplied, this is actually not proved to be the case.

18% of all sales turnover is now stuck with the government and may be, for an additional 3-4 months, this is having a significant effect on cash flow for all major suppliers, the net effect is that exports from India are reduced by 50% and all suppliers have reduced trading due to the cash crunch.

The net effect to us outside of India, is smaller parcels of product are being supplied at higher pricing.

Black Pepper Oil

Pricing has moved down due to an improved crop from all major growing regions.


As it is now off season and a poor crop due to significant rain, the crop was short by 40%.

Prices have increased significantly by 120%.


Prices continue to be upward, with drought conditions in the major growing areas of Tami and Nadu, had elevated product pricing is currently not being offered.


Reduced rain fall, has caused plants to dry up, as this is mainly a rain-fed crop, this has seen no bio-mass available for distillation. Demand continues to be high. Pure material is in short supply even at inflated pricing. Increasing pricing and less availability has prompted many traders to adulterate oil. We advise caution with quality of supply.

Market report China and essential oils - Aromatic Ingredients


The Eucalyptus story of 2017 has been a difficult one, the reduction of supply in 2016 has seen an increase in speculative trading, causing a volatile market.

This accompanied by a reduction in the 2017 crop due to heavy rains and decaying disease has caused historically high price points.

The new harvest commences towards the end of the calendar year with a completion date prior to the Chinese New Year, it is our belief that the market will remain under constant pressure until February 2018.


Prices have continued to rise steadily in 2017, this became a rolling story after poor weather conditions in 2016 reduced planting and farmers sought alternative plantings.

We are hoping the increased pricing will have encouraged more farmers to once again plant geranium, but indications are that this may not be the case and prices will remain on the higher level.

Lavender Oil

Due to the increasing supply of oil from Bulgaria and Russia over recent years, the return on Chinese lavender oil has reduced and therefore suppliers have declined.

It is anticipated that the low volume of oil from China will not effect the global supply pricing.


The increase in Cedarwood pricing over the last few years has seen a decline in demand within the market, material is available at reduced prices.

Linalool and Howood

It’s anticipated that we will see an improved crop in 2017 which should ease any supply pressures.


Pricing is under pressure to increase, the continuing poor weather conditions are making harvesting difficult and limiting supplies

Market report Lavender and Lavandin essential oils - Aromatic Ingredients

To say the available volume for supply of Lavender and Lavandin in particular Lavandin grosso is a major issue, would be an understatement.

Bulgarian Lavender

The crop has been effected / influenced for 2 main reasons.

The first being weather conditions over the winter months caused many plants to die, replanting happened in early 2017, but with such small plants the yield was significantly reduced and the growing presence of multi-level marketing companies within the aromatherapy space is adding additional pressure on available supply, during our recent visit to the IFEAT conference we were advised that that one of these companies had taken a 70t contract significantly effecting price and availability into the market.

Lavandin Grosso

Due to extreme drought conditions, the crop has declined by 15%.

This at a time when demand is naturally higher due to the reduction in available lavender, the growers know they can ask for higher pricing and therefore we expect to see a continuing surge upwards before the 2018 crop

Market report Citrus essential oils - Aromatic Ingredients

Orange / Orange Terpenes

The effect of Irma was significant as it caused major upward spikes in price.

This was mainly due to a lot of panic buying around the world, with pricing jumping over 10% in a very short space of time.

Recent information received from the States is that it is anticipated that the production of orange oil will be reduced by over 20% but growers are declaring it is more than likely a reduction of over 50%.

Normally the Brazilian supply would compensate for the reduced Florida crop but it is believed that there will not be sufficient surplus to reduce pricing, it is believed that the prices will remain firm for the foreseeable future.

Tangerine oil

The availability of this oil remains difficult with the supply of premium oil over A$50/kg for FCL

Grapefruit oil

Continued lower volumes produced worldwide, together with a bleak analysis following the Florida hurricanes, has resulted in record high prices for good quality white and pink oil, supply is limited if available at all.

We do not see any light at the end of any tunnel, unfortunately.

Market report Vegetable and carrier oils - Aromatic Ingredients

Even vegetable oil supply is having its issues but we are also seeing some levels of increased supply in other areas.

Rosehip Oil

We have seen some volumes of rosehip oil conventional and organic, finally coming onto the market even though the pricing is higher than the old historical levels. At least we have supply. We have taken positions on both conventional and organic oil.

Avocado Oil

Due to an increasing demand for fresh avocado’s the supply of oil is very tight, with material being supplied in the market to pre-agreed clients on a first come first served basis.

We believe the supply over the next 6-9 months will become increasing difficult with pressure on pricing.

Although we have some supply available, we have determined that it was important to offer our clients an alternative product and have sourced a special cosmetic grade material, please feel free to contact the sales team for information.

Castor Oil

In recent months supply has become more difficult and the price has increased due to the hard monsoon season, we are well covered on the oil so please feel free to request pricing.

Olive oil

The supply of premium quality olive oil has continued to decline in the market place, we have seen increases from our principle over recent months, with little to no sight of any reduction.

We have identified that there is an alternative being supplied into the Australian/New Zealand market which is suitable for cosmetic manufacture. Again please feel free to ask the sales team for our special offer on this material.

Market report Aroma Chemicals - Aromatic Ingredients

The influence of the “Paris Agreement” being embrassed by the Chinese government is having a big effect on the producers of Aroma chemicals in the Chinese market, that coupled with the current shortage in gum turpentine oil and perceived up coming shortfall in plinol, it’s anticipated that the price of many aroma chemicals will continue to increase over recent months.

We are already starting to see increases coming through for products whose starting material is gum turpentine (alpha / beta pinene route), we had covered well prior to the price increases, so all enquiries are welcome.

Citral (& Derivatives)

The effect of the fire at BASF’s Citral plant is continuing to have a flow on effect on Citral itself and all of the derivatives synthesised from Citral. BASF have called force majeure and the lack of product in the market is starting to have an impact

We are currently working through our supply situation and will try to continue to supply material.

If you already have a contract in place with us, one of our sales personnel will be in touch with you soon, to confirm supply availability.