market intelligence - treatt€¦ · following major investment in bulgaria some years ago, and...

plus all the regular market news

inside this issue

February [email protected] www.treatt.com

plus all the regular market news

orangeAfter yet another reduction in forecastedvolumes from the United StatesDepartment of Agriculture, the 2013/14Florida crop is now predicted to be thesmallest in more than 60 years.

distilled limeUnstable weather conditions havereduced the Peruvian crop by 10-15%as well as slightly delaying it.

ginger oil The high price of raw material has forced oil processors to delay production.

market intelligence

contents

welcome 3citrus oils 4essential oils 6organic vegetable oils 8organic essential oils 8treattarome® 10aroma chemicals 11specialty chemicals 12avocado oil project 13

2 • market intelligence - February 2014 [email protected]

Driven by a recovery in the housing market and an increase inconsumer demand, there is a more bullish outlook for the UK andUS economies in 2014. Since the start of the year attention hasshifted to the MINT countries – Mexico, Indonesia, Nigeria andTurkey. Over the next 20 years, it is anticipated that in each of thesecountries, there will be a notable increase in the population that iseligible to work relative to those not working.

The markets for several noteworthy raw materials are currentlyexperiencing a high level of volatility and this report includes thelatest market information for lemon, lime, coriander seed andginger oil.

market intelligence - February 2014 • 3www.treatt.com

welcome to...

citrus oils


more under control due to heavy extraction ofdiseased trees coupled with quick and heavyreplanting. The southern part of Sao Paulo statewhich has been dry is now seeing the rain it has beenwaiting for, so the crop could be even healthier thanoriginally expected. With that said, crop numbers arenot nearly as important to Brazil as they once were.The significance is more with how much fruitprocessors need to buy in order to produce thequantities of juice they deem appropriate to satisfydemand whist keeping prices at optimum levels,rather than how much fruit is actually available.

We recommend that customers keep their pipelinesfilled without making major decisions on newcontracts until the Brazilian 2014 crop situationbecomes clearer in the coming months. We use ourtrusted and proven global experience in marketssuch as orange to enable our customers to makeideal and informed buying decisions. This is anadded value benefit of working with Treatt.

orange After yet another reduction in forecasted volumesfrom United States Department of Agriculture, the2013/14 Florida crop is now predicted to be thesmallest in more than 60 years, which is causingsome concern for orange oil buyers. Citrus Greening(HLB) continues to plague the industry, fruit droprates are extremely high for the second year running,and aldehyde levels have been very low in the earlypart of the processing season. This persistent badnews has prompted an increase in both demand andprice for both orange oil and terpenes worldwide,most notably for new crop Florida Valencia oil, whichwill be in very limited supply. Whilst we recognize thatFlorida’s outlook for this year does not look overlypromising, orange is not all bad news.

Mexico, for example, is having quite a good orangecrop and although the 2014 Brazilian harvest remainsuncertain at this point, there have been no severeweather conditions and greening in Brazil is much


lemonAs we warned in our last market update, lemon oil“can spike upwards rather quickly” and indeed it hasdone just that. Reports that lemon production inArgentina will be down by at least 50%, a slow marketin Italy due to excessive rains and strong fresh fruitdemand for Spanish lemons have all contributed toprice increases for lemon oil over the past few months.High demand and low carryover from 2013, which wehave mentioned previously, has continued andexacerbated the situation.

We feel we need to caution lemon oil buyers that wecould see similar market conditions to 2008 in thevery near future. In 2008 prices approached modernday highs.

tangerine We already knew the Dancy crop was going to bereduced this year, but it has now also been extremelydelayed. Whilst not entirely unpredictable, it onlyaccelerates the price increases that origin willdemand, which we expect will be up some 20-30%.

distilled limeIn addition to the extraordinarily difficult key limesituation in Mexico that we have been reporting on, wenow also have troubling conditions in Peru. Unstableweather conditions have reduced the Peruvian crop by10-15% as well as slightly delaying it. Moreover, freshfruit prices there are being described as excessivelysteep and we have seen very little, if any, oil make itsway to the export market. Type A, Type B and DistilledLime oils have reached all-time record high prices andavailability is extremely limited.

Further panicked demand will certainly continue topush prices upwards. We are hopeful that the summerMexican crop will be strong, but with a number oftrees in their peak production eras producing only halfthe limes they should be at this time in their lifecycles,we are not overly optimistic. A cool head is requiredin this hottest of all citrus markets.

essential oils


ginger oil chineseThe price of fresh ginger has risen to levels between RMB3.00-3.50/500gms in comparison toRMB0.30/500gms this time last year. The high priceof raw material has forced oil processors to delayproduction, making oil supply extremely difficult. Thenew crop is not expected to be ready until April andwe do not expect any change in price levels until atleast then.

garlic oil chinese For the first time in years Garlic oil was distilled during2013. However, the volume manufactured seems tohave been at most only a few tons.

The apparent reason the factories took this decision,even at the extremely high raw material price, was toblend off with the older lots and satisfy demands for oilmeeting the FCC spec.

There remains very little oil available and the next cropis only due in June/July at which point the decision toproduce again will be the determining factor of whetherthe price continues to rise.

coriander seed oilThis market remains extremely tight with very little oilavailable until the new crop arrives in the spring. Thishas caused prices to soar with current offers in excessof the US$100 mark.

australian tea tree oil As predicted, there are limited volumes of this oilavailable from origin. The new crop is not due forharvest until April/May and we would not expect tosee that oil in Europe/USA until closer to July. It isanticipated that oil availability will remain extremelytight and prices will remain at the premium for theforeseeable future as even if the forthcoming crop ishealthy, it would not appear to be sufficient to coverthe deficit between supply and demand.

petitgrain paraguay The recent harvest was initially delayed due to theadverse weather conditions and subsequently due tothe prioritisation of other crops which are very labourintensive. Oil producers are having to fight for everykilo of leaves available which is pushing up prices. Weexpect that once the harvest is fully underway thesituation will return to normal.

indian mints Price levels for both Piperita and Arvensis varietiescontinue their downward trend, Arvensis more so thanPiperita. This has also been reflected in the price ofmenthol crystals. The main reasons for the drop inprices were the plentiful 2013 crop and the increasedproduction volumes for mint derivatives. The 2014crop is not expected to reach the volumes seen in2013 but should still be more than adequate.

nutmeg oil indonesianOver the past 12 months the Indonesian Rupiah hasdepreciated against the US$, driving prices down.However, recent reports suggest that during 2014 theRupiah could strengthen against the Dollar. As a resultwe may see prices edging up again.

market intelligence - February 2014 • 7www.earthoil.com

organic updatevegetable and organic essential oilsorganic distilled limeThe prices quoted today are nearly double that of ayear ago due to severe shortage of raw material andlack of carry-over from last season. We anticipate thatthe market will remain firm for some time.

organic expressed lime Following our report in November with regard to areduced harvest, no carry-over and high demand hasmeant the supply position is now critical and pricesare following the upward trend of conventional oil.With new oil not available for the next few months wecan only see this market continuing to firm.

organic lavender oilFollowing major investment in Bulgaria some yearsago, and with continued planting, there is now asignificant carry-over. This has persisted for the last 2seasons leading to large stocks of oil arriving in themarket and prices reverting back to 2009 levels.

organic tea treeAlong with conventional tea tree we have seen themarket continue to climb. There is very little carry-overand demand remains strong. This has resulted inprices continuing to increase.


P L A N T A T I O N S

organic baobab oil Following the recent installation of a new press inEarthoil’s Kenyan factory, pressing of local rawmaterial has been increased and the supply situationhas improved.


organic coconut oilExtreme climatic conditions, such as the typhoon inthe Philippines, has led to a shortage of available oilon the market. Both Earthoil’s organic virgin coconutoil which is made by communities on the remotePacific island of Samoa and our Fair For Life certifiedcoconut oil from India are available from ourwarehouse in the UK.

organic macadamia oil February is the primary month of the year during whichmacadamia kernels are not processed at EarthoilKenya whilst we wait for the new season to begin.

Availability around this time of year is scarce but it isan ideal time to think about your requirements for theremainder of 2014 in order for us to secure the rawmaterial and plan our pressing schedule.

treattarome®


Honey Treattarome® Tea Treattarome® Coffee Treattarome®

Banana Treattarome® Kiwi Treattarome® Pineapple Treattarome®

With the exception of the recent cold Floridatemperature that has had some impact onthe availability of field crops such as BellPeppers, the Treattarome® market iscurrently stable with no significant news toreport on. We would like to take thisopportunity to remind you of ourTreattarome® range of products which are100% natural, FTNF (From The Named Food)clear aqueous distillates. Developed usingour proprietary technology and team ofexperts, Treattarome ingredients are distilledat low temperatures over short periods. Thismethod of distillation maximises flavour

entrapment, thus producing a distillatewhose character is entirely of the fresh food.You simply can’t get any more natural.

This innovative product range is suitable fornumerous applications – from top notes inRTD (Ready To Drink) and alcoholicbeverages, to ice creams and savourysauces. Just a few examples within ourproduct range include Honey, Tea, Coffee,Pineapple, Kiwi, Banana, and Cucumber. Forfull details and listing, please visitwww.treatt.com


aroma chemicals

palm oil The natural disaster in the Philippines last year hasdevastated a large number of coconut trees resultingin a shortage of Coconut oil. As a consequence, wemay see an increase in the price of Palm Kernel oil,which is a close substitute, and its derivatives,notably mid-chain triglycerides, alcohols, aldehydes,esters, acids and ketones. Large users of Octanoicacid or alcohol (the C8 series) should certainly reviewtheir requirements and stay close to their Treattrepresentative.

iso amyl alcohol As a direct result of the shortage of Iso amyl alcohol,we are now starting to see a number of the derivativeproducts such as Iso amyl salicylate, butyrate andiso valerate also being affected in terms of price andavailability.

dihydro coumarin As stated previously, Dihydro coumarin supply hasbeen reduced due to pollution issues. However, weare receiving offers again albeit at a higher price.

China Recently, the biggest Maltol-producing factory hadto stop production temporally due to on-goingpollution problems. The pollution levels currentlytroubling much of northeastern China have reachedlevels so high it is beyond the measurements usedin the USA to monitor air quality. The Chinesegovernment has shut down over 100 pollutingfactories and taken a third of all government vehiclesoff the road, but pollution, especially in Beijing, hasremained at high levels.

Chinese exporters are also struggling with risinginterest rates and the appreciating Yuan, making theirtrades more expensive with overseas markets. Theexpansion in manufacturing activity has seen aslowdown during January, adding to recent signs thatthe nation's economic growth is meeting resistance,although we should remember that activities tend tocool down around the new year celebrations.

turpentineMaterial remains short in the market and prices arehigh compared to historical averages. As a result ofheavy rainfall during the crop season last year, priceshave escalated. Moreover, there are rumours thatlandowners would prefer to remove pine trees asthey are proving less profitable than other crops. Ifthis happens, the capacity of production of gumturpentine could decrease in China.

Although we remain outside of the usual collectionseason, which typically starts in May, there shouldstill be stocks of crude gum in factory stores to allowsome level of production to see us through until then.It is expected that the increase in value shouldencourage other origins previously priced out of themarket by China to resume some level of production.

Dairy flavours are growing in popularity, withnew sectors such as lacto-free providing furtheropportunities in dairy flavour development.

Treatt recommends the following high-impactaroma chemicals for use in dairy flavours suchas milk, butter and cheese:

specialty chemicals


Acetoin ButyrateFema 3332 has a creamy, buttery, yoghurt and custard-like aroma, used in flavours at typical levels of 0.5 – 50ppm.

Cis-6-Dodecen-4-Olide (aka Dairy Lactone)

Fema 3780 is a very powerful dairy note with a sweet, fatty, waxy, creamy and fruity odour. Typically used at level up to 10ppm for dairy flavours, but also finds use in peach flavours.

2-Acetoxy-3-butanone (aka Acetoin Acetate)

Fema 3526 has a sweet fruity and wine-like aroma, suitable for all types of dairy flavour at levels up to 10ppm.

4-Pentenoic Acid Fema 2843 has a cheesy odour reminiscent to freshly grated parmesan. Ideal for cheese and butter flavours at typical levels of <5ppm.

Methyl Thiobutyrate Fema 3310 has a powerful, fermented, cheesy, dairy, cocoa and fruity odour and is suitable for a wide range of dairy flavours at typical levels of 1-2.5ppm

S-Methyl-3-methylbutanethioate

Fema 3864 has a sharp, ripe cheesy and sulphurous odour which lends itself well to dairy and fruit flavours at levels up to 5ppm.

Avocado Oil so that they can ripen (avocados mature on the treebut then ripen once they are picked). They are thenwashed and sent to a crusher, which removes the skinand stones. This is then cold pressed at over 40degrees and then the oil is separated from the pulp.The final step is to store the oil in tanks for at least 6-8 weeks to allow the waxes to settle.

Earthoil is dedicated to projects which benefit the livesof those who are involved.

For further information on this project or any otherEarthoil project please contact [email protected] visit our website www.earthoil.com


P L A N T A T I O N S

Organic, fair trade certified project, KenyaFor the past 4 years, Earthoil has been working closelywith an organic and Fair for Life certified avocado oilsupplier.

Today, the project employs 1100 small-scale farmers,all organic and fair-trade certified, who supply themwith the avocados. Each farmer has between 1 and50 acres of avocado trees and each tree providesbetween 75-300kg of fruit per year depending on theage of the tree and the variety (both Fuerte and Hassare grown in this project). The fair trade premium ispaid directly to the farmers rather than to a communityfund as seen in most co-operatives, as the farmersare too scattered around for meaningful projects.

The avocado season runs from April to September,during which time the avocados are collected by 150pickers employed by the co-operative to collect themfrom the trees. The harvested avocados are thenbrought into the processing facility where they gothrough various stages. To begin with, they are storedin a ‘cold room’ which is kept between 6 - 8 degrees

February [email protected] www.treatt.com

meet the team

BSF 'Table Talk' ExhibitionTreatt will be exhibiting6th March 2014Barbizon Palace Hotel, Amsterdamwww.bsf.org.uk/flyers/amsterdamflyer2014bf.pdf

Food Ingredients ChinaTreatt will be exhibiting25th - 27th March 2014Shanghai World Expo Exhibition & ConvensionCenter (SWEECC) Stand 1L71/1M70www.chinaexhibition.com

In-CosmeticsEarthoil will be exhibiting1st - 3rd April 2014Halls A1-A4 Messe, Hamburg, GermanyStand 1C36http://www.in-cosmetics.com

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For more information on all our products and services please visit our website.

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