Hugo Bovill

The essential oil industry is highly complex and fragmented. There are at least 100 different producing countries, as can be seen from the map Essential Oils of the World (Figure 20.1). Many of these producing countries have been active in these materials for many decades. They are often involved in essential oils due to historical colonization, for example, clove oil from Madagascar has traditionally been purchased via France, nutmeg from Indonesia through Holland, and West Indian and Chinese products through Hong Kong and the United Kingdom. The main markets for essential oils are the United States (New Jersey), Germany, the United Kingdom, Japan, and France (Paris and Grasse). Within each producing country, there is often a long supply chain starting with the small peasant artisanal producer, producing just a few kilos, who then sells it to a collector who visits different producers and purchases the different lots that are then bulked together to form an export lot, which is then often exported by a firm based in the main capital or main seaport of that country. This exporter is equipped with the knowledge of international shipping regulations, in particular for hazardous goods, which applies to many essential oils. They also are able to quote in US$ or Euros, which is often not possible for small local producers (Figure 20.2).

Producers of essential oils can vary from the very large, such as an orange juice factory where orange oil is a by-product, down to a small geranium distiller (Figures 20.3 and 20.4).

The business is commenced by sending type samples that are examples of the production from the supplier and should be typical of the production that can be made going forward. Lot samples are normally provided to the purchaser in the foreign country to enable them to chemically analyze the quality organoleptically both on odor and flavor. It is essential that the qualities remain constant as differing qualities are not acceptable and there is normally no such thing as a "better" quality; it is either the same or it is not good. This is the key to building close relationships between suppliers in the country of origin and the purchaser.

Many suppliers try to improve their processes by adapting their equipment and modernizing. In Paraguay, petitgrain distillers replaced wooden stills with stainless steel stills on the advice of overseas aid noncommercial organizations (NCOs). This led to a change in quality and the declining usage of petitgrain oil. The quality issues made customers unhappy, and in fact the Paraguayan distillers reverted back to their traditional wooden stills (Figure 20.5).

Market information, as provided by the processor, is essential to developing long-term relationships. To enable the producer to understand market pricing, he should appreciate that when receiving more enquiries for an oil, it is likely that the price is moving upward and it is by these signs of demand that he can establish that there are potential shortages in the market (Figure 20.6).

Producers and dealers exporting oil should be prepared to commit to carry inventory to ensure carryover and adequate delivery reliability. It is important to note that with climate change, weather and market conditions are becoming increasingly important, and prior to planting, advice should be sought from the buyer as to their intentions, for short, medium, and long term. Long- and medium-term contracts are unusual and it is becoming increasingly common for flavor and fragrance companies not to commit over 1 year but to buy hand to mouth and purely give estimated volume needs going forward. This strengthens the role of the essential oil dealers, of whom there are very few remaining in the main trading centers of the world, such as the United States, France, the United Kingdom, Germany, and Japan.

Essential Oils Palm Map
FIGURE 20.1 (See color fold-out insert at the back of the book) World map showing production centers of essential oils. Courtesy of Treatt PLC.

Food & beverage ^ manufacturers

Distillers in country of origin

Distillers in country of origin

Food & beverage ^ manufacturers

Giftgase Haut
Essential oils

FIGURE 20.2 Flowchart showing the supply chain from distiller to finished product.

FIGURE 20.2 Flowchart showing the supply chain from distiller to finished product.

Orange Juice Factory
FIGURE 20.3 South American orange juice factory. (Photograph by kind permission of Sucocitrico Cutrale Ltd.)

FIGURE 20.4 Copper Still in East Africa.

FIGURE 20.5 Petitgrain still.


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