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MARKET REPORT FALL 2016

The following report contains updates on the current trends in production and availability of the most in-demand Essential Oils and Raw Materials sourced from around the globe.



Lavender Oil

Bulgaria has officially become the world's largest producer of Lavender Oil surpassing France, with production consistently on the rise. The harvest of the lavender crop is July to August. From 2011 to present, Bulgaria has doubled its lavender production from 60 metric tons to a forecasted 120 metric tons this year in 2016. France has seen its fair share of difficulties with lavender plantations due to diseased crop that require replanting making it a less economical endeavour in recent decades. Areas for lavender production have decreased, increasing prices for French Lavender. Regardless, French Lavender remains a top pick and supply is met with great demand, keeping prices firm. China on the other hand, having been a large player in the lavender market has diverted its attention from lavender production to other projects in agriculture, making its exit from the lavender market. Meanwhile, Spanish Lavender contributes a modest 10% to global Lavender Oil production, mainly coming from the province of Guadalajara near Madrid. Overall, global Lavender Oil production is slightly higher this year with market prices for Lavender Bulgarian remaining consistent at around Euro 60-65/Kg.

Lime Oil

Lime production in Mexico estimated to be 25% lower this year, increasing the price of Lime Oil drastically. A combination of unfavourable climatic conditions and citrus greening disease caused the late lime season which is predicted to come to an early close, producing a painfully small yield. Supply is low while demand is high, causing extremely high pricing. Brazil has also faced some unfavourable weather conditions for fruit production. Demand within Brazil for fresh fruit is high and approximately 15% less limes are being sent for processing. Prices for Lime Oil expected to continue to firm.

Lemon Oil

Argentina lemon crop now in production, was delayed due to excessive rain fall. However, Argentine lemon exports are expected to be over 50% higher this year and will be making up for Spain's 40% decrease in lemon production for the fresh fruit sector. Spain and Italy are currently experiencing extremely high fruit prices due to poor crop yield which is in-turn driving up oil prices. Forecast of the abundance of Lemon Oil for the next quarter coming from Spain, Italy and Mexico are said to be slightly lower than the previous year. With Argentina making up for a deficit in the fresh fruit market in Europe, lemon for processing is estimated to be 10% lower overall. Lemon Oil prices will remain consistent (on the higher end) but slightly lower than last year provided that no detrimental changes in weather occur. Fast-forwarding to 2017, Spain's crop is estimated to be 20% higher, levelling out the playing field in the lemon market.

Orange Oil

Orange Oil prices are rising as supply declines. In the second half of 2015, Brazil experienced extremely high temperatures during bloom which resulted in excessive flower drop and reduced expected crop size for 2016/2017. Inventories of Orange Oil and D-limonene are low. Citrus Greening has had dramatic impact on Florida orange crop for past few years. Crop yield is down 16% compared to last season. D-limonene and terpene prices are not expected to drop in the next few months. Meanwhile, Californian orange production is slightly up compared to recent years. However, California is historically a small contributor to the total US Orange crop.

Jojoba Oil

Global Jojoba production is ever increasing in attempt to meet demand for this highly economical desert crop which produces half of its weight in nutrient rich Jojoba Oil. Argentina is a major player in Jojoba production accounting for half of the global market supply, while United States contributes 20%, Israel 17% and Peru at 10%. Australia, Egypt and Mexico also contribute a small portion to the Jojoba Market as these countries also have dry, arid regions conducive for growing. Increases in production have been observed coming from Argentina, Peru, Australia and Mexico. However, unfavourable weather conditions are currently restricting optimal production and prices are expected to increase due to supply lagging behind demand.



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