MARKET UPDATE ::: CooksonCo.com ::: Red Bank, NJ USA - The Center of the Essential Oil Universe!

The following Market Update is intended to provide both buyers and suppliers with a snapshot of prevailing market conditions. We welcome your offers and inquiries.

August 12th, 2010

Announcement:

I wish take this opportunity to advise that I am no longer full-time involved in the operation of Cookson & Hunt International. However, I will likely return occasionally as the needs of the business dictate.

I would like to express my heartfelt thanks to my many friends and business associates around the world for their support over the years. It has been invaluable in making the company the premiere international essential oils broker that it is today.

I hope that the relationship has been equally rewarding for you too.

My sincere personal regards,

David Cookson

A MESSEGE FROM CHRIS HUNT:

IT HAS BEEN A GREAT PLEASURE AND HONOR TO HAVE WORKED WITH DAVID COOKSON FOR THESE PAST YEARS. AS DAVID TRANSITIONS INTO SEMI-RETIREMENT IT IS AN ASSURANCE THAT HE WILL BE “ON CALL” AND STEP UP WHEN HIS EXPERIENCE AND EXPERTISE ARE NEEDED TO ASSIST THE COMPANY.

DAVID HAS BEEN A MENTOR AND A FRIEND TO ME. WHIILE BUILDING THE BUSINESS WE SPENT A MAJOR PORTION OF OUR LIVES TOGETHER…OH, IF THESE WALLS COULD TALK…

ALWAYS CHARMING, AFFABLE AND QUICK WITTED, IT HAS BEEN AND WILL CONTINUE TO BE A PLEASURE TO WORK WITH HIM AS THIS COMPANY CREATES IT’S FUTURE.

CHRISTOPHER HUNT

PRESIDENT

June 16th, 2010

Commentary: We believe that it is safe to say that inflation has hit the essential oil and aroma chemical industry. Practically all raw materials are firm in price and many are scarce and are proving to have difficulty obtaining offers. Due to the worldwide recession, the lack of purchasing/ contracting at origin during the last quarter of 2008 and all of 2009 has forced cuts in production. This combined with limited stocks in the hands of resellers as well as strange weather patterns worldwide could be a recipe for even higher prices to come.

Orange Oil & Orange Oil By Products: Offers are hard to come by with the major producing country reporting no availability of oil until September.

Cinnamon Leaf Oil: As previously mentioned, in recent Market Updates, cinnamon leaf oil prices have increased by 20+% over the last few months.

Cardamom Oil: Still very tight.

Citral Litsea: Natural Citral Ex Litsea has recently moved up with few offers in the market.

ONE FINAL NOTE: The World Cup has begun and we enjoy discussing the matches with our friends in our industry all over the world!!!

May 17th, 2010

Commentary: We were asked a question to which we did not have an answer.

The question was: What is the derivation of the expression "cheeky" (as in "cheeky bid")?

Since we confront cheeky bids on a regular basis we really need to have an answer. Any ideas?

By the way, do not fail to use the connection to our Trading Floor located at the bottom of our Home Page.

Indexes: The CHIC Flavor & Fragrance Indexes both jumped quite a bit in April......see the full monthly and yearly records from the link on our Home Page.

Cinnamon Leaf Oil: Rain has curtailed collection of oil, prices have advanced.

Orange Oil: Prices have plateau-ed and the cheaper future prices being quoted by speculators suggest that the Brazilian new crop is going to be sufficiently large enough to bring prices down.

Menthol: The mint crop in India is coming and, as usual, prices are rising. Does it reflect a potentially short crop or purely speculative activity? We have given up trying to make such a determination!

April 16th, 2010

Commentary: In our last commentary we referred to the adverse weather conditions that have been occurring around the world.

From droughts to floods, from hurricanes to earthquakes and from avalanches to locusts, Mother Nature seems to be asserting her power with awesome effect. Now a new phenomena must be added....volcanic ash.

Already we hear the ash cloud from Eyjafjallajokull - aside from being almost unpronounceable- is endangering the citrus crop in England, and it is clear that Sweden will not be producing any patchouli oil this year.

People forced to live at Heathrow airport for the next few months have begun planting crops on the runways and it is only a matter of time before international relief agency, Doctors Without Aircraft, begin to arrive.

We could be in for some major price changes, as well as shifts in supply channels.

What's next?

March 25th, 2010

Commentary: Being on the Board of IFEAT is an honor, and reflects an individuals' senior position within the essential oils industry,. However, it also comes at at price. Firstly, it demands a lot of time, and secondly it is unpaid. In fact, Board members pay all their own expenses, not just to Board meetings (usually held in London) but also to scout-out future venues for the annual IFEAT Conference.

It is often a thankless task, yet we continue to have a very dedicated and hardworking Board team steering the daily activities of IFEAT.

Just for the record, we have received no coaching or payment for these comments.

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Citrus Oils: Most oils in this category are looking firm as Mother Nature conspired to unload adverse weather in many parts of the world.

Reviewing the statistics, and the supply & demand picture, we have to conclude that price reductions for orange, lemon & lime oils (and their byproducts) are not a likely scenario during this calendar year.

Chinese Oils: Here-again, many oils have advanced as drought continues to create problems. The upward price momentum is likely to be with for some time. In fact, Chinese shortages- both for shipment and on the spot could cause some major problems for users.

The resulting disruption in turpentine production will impact availability of many aroma chemicals and oils.

March 19th, 2010

Commentary: A serious ongoing drought in China could adversely impact production of a number of oils produced in the southern part of the country.

Actually, we are seeing a firming in prices from many areas....petitgrain, cardamom, rosewood, lemon, geranium, cassia and orange oils to mention a few.

Although the worst of the "financial meltdown" appears to be behind us, it seems the uncertainty of what lies ahead (coupled with the influence of the accounting department) is still making many company's gun-shy about making large long- term commitments. This in turn continues to create shortages on the spot.

With this in mind, it is worth our mentioning that being the facilitator of many sales of oils from overseas, we are uniquely placed to know where surplus spot lots might be available for re-sale.

Corianderseed Oil: Lack of demand has prices slightly off recent highs but there is also a suggestion that present lower prices will dampen farmers/ distillers enthusiasm to plan new crop plantings.

Do present prices actually warrant a move to other crops?

Lemongrass Oil: Prime Indian shippers are reporting that some, less-than-prime shippers, maybe adultering lemongrass oil with chemicals to reduce costs.

Cinnamon Leaf Oil: The monsoon has not yet started in Sri Lanka. Oil is in short supply and prices are expected to continue moving higher.

Indexes: The CHIC Fragrance Index jumped this month, mainly reflecting price increases for Chinese oils (see above). The CHIC Flavor Index also moved up.

February 16th, 2010

Commentary: The East Coast of the US has experienced unusual amounts of snow this winter....and it's not over yet! Luckily, many of the "crops" produced in this region are cultivated inside labs rather than on farms.

Holidays: The Chinese (Lunar) New year started on February 14th and these days many Asian businesses close for a full week.

Even a limited disruption in the supply chain often causes some severe short-term problems.

Lemon Oil: The freeze that occurred last August, coupled with the drought that only ended after flowering, is reported to be the primary reason for the new crop to be late....and much smaller than anticipated.

Are we being set-up for even higher prices than the (higher) prices we are seeing today?

Petitgrain Oil: El Nino is reported to again be the culprit forcing prices higher.

February Florida Crop Report:

All oranges lowered to 129 million boxes

-Non Valencia oranges lowered to 66 million boxes

-Valencia oranges lowered to 63 million boxes

-FCOJ yield 1.56 gallons per box

All grapefruit lowered to 18.8 million boxes

All tangerine lowered to 4.0 million boxes

Tangellas unchanged at 900 thousand boxes

January 29th, 2010

HAITI: OUR THOUGHTS AND PRAYERS REMAIN WITH THE PEOPLE OF HAITI WHO CONTINUE TO FACE UNBELIEVABLE HORRORS IN THE AFTERMATH OF THE EARTHQUAKE.

IN THE REALM OF IDIOTS, WE SAW TED TURNER ON TV SAYING HE HAD NOT BEEN TO HAITI, BUT HAD VISITED JAMAICA (EH?)

.................................................................................................................................................

Commentary: Despite the very difficult economic times, we continue to see a deterioration of the general work ethic......................for so many the idea of "doing a good job", let alone "going the extra mile (or inch!)", is not in their lexicon.

In part this seems to reflect a lack of proper training but limited training does not explain laziness or a lack of desire to succeed. Supervisors must also shoulder the blame; poor work habits directly impact a company's bottom line.

We wonder where this is all leading.

Indexes: Following the trend of the last few months, the CHIC Flavor & Fragrance Indexes both advanced this month.

As mentioned perviously, we are inclined to think that this tendency will become the pattern in the coming months.

Orange Oil: Origin offers (particularly of d'limonene/ orange terpenes) remain illusive. A full determination of the freeze damage in Florida is still awaited.

Rosewood Oil: Oil blessed by IBAMA occasionally trickles out but not at a rate that can meet global demand.

Indonesian Oils: Almost all oils from this country have been rising in price.......the important oils of nutmeg and patchouli certainly fall within this category.

Eucalyptus: Prices have moved higher.

Corianderseed Oil: Prices are holding steady but buyers are looking for lower prices.

January 13th, 2010

Haiti: It is hard to imagine the devestation and misery that has again been visited to Haiti. Our thoughts and prayers are with all those suffering.

We can only hope that the predictions of the fatalities and injured are over-stated.

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Commentary: As the new year begins we would like to thank all our suppliers, buyers & vendors for their support during 2009. We hope to achieve even more together in 2010.

So far this year we are only seeing higher prices for most oils..........the worst of the recession does indeed seem to be behind us.

Orange Oil: While it is too early for the experts to determine the extent of the damage to the Florida orange crop following the freezing conditions this month, the last USDA crop Estimate had already put this seasons' crop at 135 million boxes, down 17% from last year. Brazil has similarly reported a smaller crop and excessive damaging rains.

With offers virtually impossible to obtain at the moment we feel confident in predicting that orange product prices will continue moving higher in the weeks and months ahead.

Lemon Oil: We are told that the higher prices coming from Argentina are a reflection of their having done very well selling concentrate and thus don't need to chase oil prices down. Has Argentina made such an economic recovery that such thinking is possible?

Garlic Oil: Mexican prices look a real bargain next to the numbers now being asked by China.

Freight Rates: The mothballing of so many ocean cargo ships has reduced the available tonnage to a point where freight rates are rising (even as actual international trade is still recovering).

Indexes: The CHIC Flavor & Fragrance Indexes both moved last this month (perhaps confirming our earlier thoughts regarding prices moving higher in the coming months).

December 16th, 2009

Commentary: What will the New Year bring? We have to think that as the world economy (hopefully) gets back on track, prices will trend upwards. Physical stocks are still rather limited so sellers should benefit as demand does rebound.

A stronger US$ might contain prices somewhat, but accurately predicting the direction of exchange rates remains a skill that few have mastered.

Menthol: Reports suggest that speculators- rather than established supply & demand factors- continue to dominate trading on the Indian MCX futures market. Not a good sign for users, or the market at large.

Orange Oil: Prices have jumped again. Rain levels in the Brazil growing areas exceed any recorded in the last 67 years! Fruit supply and yields have been adversely affected.

Given the smaller-than-expected Florida crop it does look as though prices of orange derivatives will remain firm.

Clove Oil: The clove crop in Madagascar is reported to be 2,000mt this year versus 12,000mt last year! Although distillation is likely to begin in January, prices will likely maintain upward momentum thru to March/April.

US Customs: The new vendor compliance requirement (the so-called 10+2 Rule) is to be fully enforced on January 26th 2010. The consequences of non-compliance can be very expensive.

December 4th, 2009

Commentary: We don't usually mention specific companies or individuals here so we won't start now. However, here is the link to the age old question: Where is Hugo?

www.hugois.ontheroad.to/capetown

Will he arrive in time for the World Cup? Will he find the source of the Nile? Will he discover an antidote to the afflictions caused by Mangoolie oil? Will the world come to an end?

Like many mysteries in the essential oil trade only time will tell.

Cassia Oil: Limited rainfall earlier in the year had reduced availabilitly. Prices are firming.

Argentine Lemon Oil: We are getting conflicting reports...On the one hand.......

the drought has ended but
the drought stressed the trees so
next year's crop could reduce the excess inventory leading to
higher prices

and on the other hand...........

the drought has ended so
the trees should not be too adversely effecte4d and
producers will not be able to hold onto stocks indefinitely as
demand remains static

Resellers are still cheaper than origin and this is usually an indicator that spot stocks exceed demand.

Eucalyptus Oil/ Eucalyptol: These are the two latest items that are in short supply on the spot.

Novemebr 25th, 2009

Commentary: Individual companies continue to run short of various oils & chemicals on the spot; the desire to begin large scale inventory replacement is often being contained by economic & financial concerns.

However, in many instances the companies that have resumed importing have been able to benefit from lower prices at origin (versus firm spot prices).

Lemon Oil: Agricultural residues (AR's) have become a major quality issue and this is dramatically highlighted by the following US import statistics from Spanish lemon oil.

2004 2005 2006 2007 2008 2009

160 Tons 97 Tons 85 Tons 95 tons 12 Tons 6 Tons

All origins are struggling with the AR problem but, as the above figures clearly show, Spain has been the supplier effected the most. Given this situation- which makes sales to the flavor industry almost impossible- we are mystified as to why they continue to ask such high prices.

Nutmeg Oil: Buyers have had to agree to the higher prices coming from Indonesia. This oil looks as though it will remain firm for the nest few months.

Garlic Oil: More and more Chinese qualities are failing to meet FCC standards. What is happening?

Geranium Oil: Chinese & Egyptian oils have seen increases since the IFEAT Conference.

Indexes: Both the CHIC Flavor & Fragrance Indexes advanced in November. The weak US$ is obviously a contributing factor.

Holidays: November 26th is Thanksgiving Day. All US businesses will be closed.

October 30th, 2009

Commentary: The IFEAT Conference in Shanghai turned out to be a much differet affair to the last event in Montreal. In general the mood was much more upbeat, with the prices of a few major oils rebounding from the recent lows.

Shanghai itself was quite amazing in terms of the construction and the overall development which had taken place over the last 10+ years. It was also delightful to meet old friends, many of whom do not look old at all.

The IFEAT knapsacks were most useful and will be followed next year by the distribution of camoflaged pup-tents. Thus equipped, the 2011 IFEAT conference willl be held on the slopes of Killimanjaro (bring your own kerosene stove).

Another highlight of the event was the IFEAT Dinner which provided food & entertainment, the likes of which is rarely seen or heard these days.

Indexes: The CHIC Flavor Index includes Nutmeg oil. For the moment- following the awful typoon- offers are unavailable. We have had to estimate the present price. This may turn out to be very different from the situation on the ground.

The CHIC Fragrance Index is only slightly changed from last month.

Lemon Oil: Producers continue to hold prices up in the face of slow demand. As usual the direction of prices will ultimately be decided by the action (or non-action) of buyers.

Orange Oil: Lower prices provided the platforn for the resin industry to take more oil from the market than usual. This, coupled with lower Florida crop estimate and suggestions of bloom blight in Brazil, had prices jumping by nearly 20% during Conference.

We are hard pressed to think we will return to levels of a few months ago.

Mangoolie Oil: With the arrest of the largest producer on charges that they "added known adulterants which produced warts on the extremities", we could sede a change in the marketing strategy of this very versatile oil.

September 28th, 2009

Commentary: In the last 20-30 years both China & India have emerged as the premier suppliers of essential oil to the trade.

Now, China is at the early stages of creating a viable citrus industry; it is not unlikely that in another 20-30 years China will be a major factor in this business. India already dominates the menthol/ arvensis market.

Yet problems loom - see our following comments.

Lemongrass Oil: An extremist group called Nazals has apparently been damaging distilling units in the India growing areas based on their conviction that the land should be used for food production rather than aromatic plants.

This is the first time we have heard of such a campaign but could it become more of a factor in other under-nourished areas?

A shortage of field workers has also been sited as a developing problem.

Cinnamon Leaf Oil: Strong demand has prices edging higher.

D'Limonene: Prices have stabilized and have in fact moved up slightly.

Ginger Oil: Spot prices still compete with origin.

Shipping: We noticed how ocean freight rates have been increasing, instead of decreasing in this economic environment. We delved a little deeper and found that the shipping lines are month-balling vessels to reduce capacity and thus push rates higher.

Apparently, in the vicinity of Singapore harbor/ Malaysia alone, around 500 deep sea vessels are parked without cargo! A charter of an 80,000 ton tanker 12 months ago cost $50,000 per day. Now the same vessel would cost around $5,500!!!!

It seems the shipping lines have taken a page out of the airlines playbook.

September 18th, 2009

Commentary: The Citrus Short course has just ended in Florida, next week is the WFFC Annual Dinner and the IFEAT Conference in Shanghai is fast approaching. It's a tough life being in the essential oils business.

At the IFEAT meetings the tone is often set for the pricing of a particular oil(s). With demand slowly re-appearing, and the US$ continuing to weaken, perhaps we will see sellers aiming to capitalize on these factors.

Garlic Oil: Prices for both Chinese & Mexican oil have been advancing due to strong demand for fresh garlic and a poor crop in China.

Nutmeg Oil: Hereagain, the limited availability of good quality oil is enabling exporters to edge prices higher.

Rosewood Oil: Delays in getting IBAMA credits translated into oil production continue to thwart efforts to renew exports.

Indexes: Both the CHIC Flavor Index and the CHIC Fragrance Index dipped slightly this month (check the monthly results over many years from the link on our Home Page).

Today's question: Who are the Mashco-Piro?

September 9th, 2009

Commentary: October 18th sees much of the industry convening in Shanghai for the annual IFEAT conference....always a wonderful time to renew old friendships, and develop new ones. Gahn bay!

Lemon Oil: A recent overnight frost in the growing area in Argentina does not appear to have caused any major damage although processors are now saying yields are starting to fall.

We still need more concrete information and/ or see some volume demand appearing to radically change our bearish thinking.

US Mints: Overall the new crop is looking good, although the potential for elevated levels of menthofuran exists in some areas.

Lemongrass Oil: Indian prices have firmed based on increased domestic demand (and of course a weak US$- which is effecting prices for many oils and aromatics.)

Orange Oil: Contratictory information is in the market....a one year high for juice futures suggest more oil will be available, while reports from Florida put the upcoming crop around 140-145 million boxes, compared to 170 million this season.

We remain un-inclined to think that in the present market environment prices can firm.

July 28th, 2009

Commentary: Our comments here have been limited over the last few weeks as markets have remained very quiet (but with prices still tending to edge lower).

However, recently we have been seeing a slow revival of demand, particularly for some of the "bargains" that are appearing. At the same time the availability of some oils on the spot is dwindling. Replacement buying is still a tepid affair.

Florida Citrus: The latest crop forecast puts orange production at 159.6 million boxes (up to 2 million boxes from last month) and grapefruit at 21.8 million boxes (down by 700.00 boxes).

If these numbers hold until harvest, oranges will be down 10 million boxes from last year.

Indexes: Both the CHIC Flavor Index & Fragrance Index slipped slightly this month.

Rosewood Oil: Although the back-log of orders is almost cleared, getting IBAMA approval for planting/cutting/processing/exporting wood/ oil is still a long and tortuous affair.

Corianderseed Oil: Although a number of exporters are bullish, based on smaller planted acreage, reseller prices have in fact been drifting down.

Nutmeg Oil: This is one oil where buyers have had to accede to exporters demands for higher prices.

Grapefruit Oil: Are prices heading to a level where there might be a switch back to the natural product? We can't say we are seeing this yet but the volume of oil on offer suggests that prices will continue to head to a range where perhaps some demand might re-appear.

Lemon Oil: When orders do appear, resellers are ready to compete with origin to move high prices stocks.

June 8th, 2009

Commentary: Given the way some buyers pay these days, we are thinking of changing our name to the Cookson & Hunt International Bank. Will this guarantee us a US Government stimulus check?

Meantime, the weakness of the US$ is providing a useful stimulant for overseas buyers.

Lemon Oil: Little rain and hot weather in Argentina has some areas experiencing fruit droppage. Some exporters have suggested that this could affect availability and prices.

Fresh fruit demand remains very soft so it is difficult to imagine that lemon oil production will be negatively impacted. In fact, more fruit might get processed as a result.

Arvensis Peppermint/ Menthol: The pioneer of this business is Brazil is finally closing up shop; a reflection of how economic realities can change even the most entrenched market-place fundementals.

Orange Products: Lower prices are bringing forth more inquiries for terpenes. Demand for oil remains tepid.

Indian Arvensis: With 40% of the crop now in, and the weather looking good, a record crop could be harvested.

May 20^th, 2009

Commentary: We notice that some multi-nationals have out-sourced their Accounts Payable function overseas. In one instance the Accounts Payable Department has become “Accrouts Plowable Depto” due to the limited English of the “Accountants”. In such an environment, getting paid has become a major problem (or is it intentional?) for suppliers.

Nevertheless, we are now thinking of outsourcing our Accounts Payable function. We understand The Pyongyang People’s Accounting and Ballistic Missile Co does very good work, particularly in terms of stalling!

Orange Oil: As suggested recently, prices are cracking.

Indexes: Only minor changes to the CHIC Flavor & Fragrance Indexes this month.

Corianderseed Oil: Prices have come off the earlier highs but the potential of a reduced new crop has helped to avoid a real sell-off (so far).

Rosewood Oil: Flood levels on the Amazon are creating a problem finding dry ground for the storage of wood………..another in a string of problems that have slowed production.

Magoolie Oil: Demand remains strong as we head into the groundhog mating season.

Holidays: Monday May 25^th is Memorial Day in the US. All business will be closed.

COOKSON & HUNT USA IMPORT REVIEW

ON THE FIRST WEEKDAY OF THE 2008 IFEAT CONFERENCE HELD IN MONTREAL, THE US STOCK MARKET FELL BY APPROXIMATELY 700 POINTS. WE RANDOMLY CHECKED THE USA “ESSENTIAL OILS” IMPORTS STATISTICS BEGINNING OCTOBER 1^ST, 2008 THRU THE END OF MARCH 2009 FROM MAJOR TRADITIONAL PRODUCING/SUPPLYING COUNTRIES AROUND THE WORLD. HEREWITH BELOW ARE OUR FINDINGS:

ARGENTINA -20%

BRAZIL +11%

CHINA -19%

FRANCE -25%

INDONESIA -38%

ITALY -32%

MEXICO +22%

RUSSIA -12%

WE WILL POST SOME SPECIFIC FIGURES IN FUTURE UPDATES

May 13th, 2009

Commentary: We are noticing that despite the global slowdown, origin producers are not pressing to sell as aggressively as we would have thought. We find this rather surprising.

On the other hand we can also say that we are beginning to see buyers slowly re-emerge from hibernation, as can be seen from the following comments....

Ginger Oil: A rare event ......prices from China have jumped as stocks of ginger roots for distilling dwindle.

Lemon Oil: The approach of the Argentine new crop has helped to ease prices. This trend will likely continue.

Lemongrass Oil: Here again, the arrival of new crop supplies has pressured Indian prices.

Rosewood Oil: Production is still lagging behind demand (and the delivery of orders booked many months ago). Unusually higher water levels in the Amazon have slowed the delivery of wood to the factory.

Nutmeg Oil: A firmer Rupiah v. US$ exchange rate has pushed prices considerably higher than that of last sales.

Cinnamon Leaf Oil: Demand has picked-up at present lower levels.

Wintergreen Oil: Has the unprecedented "disappearace" of this oil-and the accompanying stratospheric price rise- banished it to Do-Do bird land?

Aniseed Oil: China Star aniseeds are used to produce Shikimic acid which in turn is used to produce Tamiflu. Te demand for Tamiflu as a preventive for Swine Flu is cutting into the amount of seeds that are being distilled for oil.

April 27th, 2009

Commentary:

Ever since we started this website nearly 12 years ago, we have refrained from mentioning actual prices....differing quantities, qualities, terms of delivery and payment etc. make this a very hazardous task.

Today, a price put up in the morning is likely to be outdated by the afternoon. What this means is that competitive pricing (ie. a price at which a buyer will actually buy) is achieved by being aware of the total market of producers and resellers, both at home and abroad. This is our forte, and the foundation of our business model. In fact, our doctoral thesis was written about models!

Menthol: Could this finally be the year production outpaces demand?

Lime Oil: Some reports from Peru are very bearish on the crop prospects but-once again- lack of sustained demand will dictate the direction of prices.

Orange Oil: Brazilian exports last year were down 5.27% to 30,079mt.

Florida processors are leading the move to lower prices.

Indexes: Both the CHIC Flavor index and the CHIC Fragrance Index fell this month, reflecting the continued malaise in the market.

April 20th, 2009

Commentary: Buyers continue to live hand-to-mouth which, in this market environment, is quite understandable.

From the supply side we are getting vibes that suggest some producers , facing the pending arrival of a new crop, are ready to start discounting prices.

THIS COULD GET UGLY!

We recommend: 1. selling when an opportunity arises (you will likely be able to replace cheaper, either in price or time) and 2. buying only as needed.....but don't automatically dismiss a "bargain" without careful review (sometimes a bargain becomes available because of factors unrelated to the supply/demand picture; the best example being a cash flow problem).

California: Drought has forced state authorities to declare a state of emergency. While not a major essential oil producer, California does have qualities that some buyers are locked into.

Brazil: Florida citrus growers are considering an anti-dumping suit against Brazilian shippers of orange juice. It has been suggested that the announcement of a potential suit might be designed to deter further under-pricing by the Brazilians.

On the orange oil front, slow demand could see Brazil and Florida becoming more price aggressive.

Zdravetz Oil: We have never sold and of this oil but we like to mention it every now and again because we don't want producers of this, "last on the list oil", to think they are totally forgotten! We also like the sound of it.

March 24th, 2009

Commentary: Bargains abound, but there is still a great deal of hesitancy as buyers await a stabilization of the global economy, and in turn a revival of consumer demand.

Over the years fortunes have been made buying at distressed prices. Similarly, large sums have been lost speculating on the timing of markets returning to "normal".

Nevertheless, we can't help thinking that some of today's prices will look very cheap one year from now (we are still angry that we didn't buy some 100 tons of lemon oil at $5.00/ kg!!)

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Grapefruit Oil: A few months ago we questioned whether demand might be reviving for this product. We now know the answer.

Lemon Oil: All the major producing areas are in the market as sellers, but in fact resellers are likely to be the most aggressive when orders are put on the table!

Orange Oil: Like most oils, prices for orange oil and derivatives are drifting.

Lime Oil: Here again demand is spotty. Lime terpenes seem to have more life in them.

Indexes: The CHIC Flavor & Fragrance Indexes for March are only marginally changed from February. Hopefully we are seeing the glimmer of prices stabilizing.

March 13, 2009

Commentary: To save on bank charges, companies often send shipping documents directly to their overseas buyers' bank for collection.

THIS CAN BE HIGHLY DANGEROUS!

The buyers' bank has no relationship with the overseas shipper and therefore has no obligation to follow any of the collection instructions the shipper provides. In fact they have no obligation to do anything at all (and we have seen this happen on occasions!).

The correct way to handle this type of situation is for either the shipper to present the documents to their bank for collection via their banking correspondents, or use the "indirect" collection system (banks provide forms for this procedure). Again, do not send original shipping documents directly to any bank with which you do not have a relationship.

Brazil: Although forest-clearing in the Amazon basin has slow, deforestation still accounts for two-thirds of Brazil's greenhouse gas emissions.

Tahiti Lime Oil: Brazilian new crop prices are quite a bit higher than Mexican.

Rosewood Oil: Slowly the back-log of orders is being cleared; we hope to be again back in the market in the coming months.

February 27, 2009

Commentary: We have mentioned both of the following issues recently, but they bear repeating.

1. The drought in China could endanger the production of a number of essential oils and

2. the reluctance of importers to buy replacement oil shipments from the origin(s) could lead to shortages on the spot.

We urge buyers to consider both of these concerns now........together they could create some major problems (despite the overall slow demand picture).

Certainly on the flavor side of the business, there should be less concern about faltering demand..........giving up eating is unlikely to become widespread.

China: We are beginning to see that some of the "cheap" prices being offered, are for qualities that match the "cheap" prices. As yet buyers are not keen to sacrifice quality for price.

Tahiti Lime Oil: New crop prices do not seem to be at a level where buyers will make any quick moves.

Orange & Lemon Oil: Prcies for both these oils are drifting as buyers remain on the sidelines.

Index: Both the CHIC Fragrance & Flavor Indexes slipped this month, but perhaps not as much as one might have suspected.

February 12, 2009

Commentary: We receive a number of emailed Market Reports on developments effecting commodities from around the world. We are always intrigued when the "To" includes all the people receiving the message (rather than hiding them as "undisclosed recipients").

Our main objection: highlighting your desire to try and sell to your buyers' buyer is generally never a good idea!

Overall we are seeing most prices under pressure as buyers adopt "hand-to-mouth" purchasing tactics.

However, we are also seeing another trend developing: many are afraid to buy from origin, working on the basis that by the time the goods arrive even lower prices may prevail. This strategy could lead to shortages on the spot as inventories disappear, and do not get replaced!

Remember, local stockists provide a valuable "insurance" service, holding goods in stock for immediate delivery. When they don't get support from users the repercussions can be painful.

Grapefruit Oil: As Florida grapefruit production contracts, oil supplies continue to shrink, with the main impact being on white oil (pink fruit being the preferred variety at the consumer-more profitable-level).

White oil is available from overseas sources but the low level of nookatone in such oil limits the outlets.

China: Many crops- and essential-oil-producing plants -in the eastern & central provinces are imperiled by up to 100 days without rain. We are monitoring this situation closely as it does have the potential to create some major supply problems in due course.

Meanwhile, it would not be amiss to check stocks and ask us about reseller possibilities.

Peru: In this instance the La Nina effect is being sited as the primary reason lime production will be around 120,000mt this year, down from 141,000mt last year.

Brazil: We read that in Far West Brazil members of the Kulina tribe killed and ate a farmer. We don't know what he was farming, but getting eaten is a hurdle that no farmer should face. If it became widespread it could easily halt production of many important crops.

Summary: What with all the natural disasters ocurring recently (ranging from droughts to fires, and earthquakes to floods....and don't forget the global financial meltdown, and even getting eaten) the only thing we are now missing is locusts. We await news of their arrival.

February 4, 2009

On January 26th US Customs introduced the 10+2 Rule. This means that all shippers need to provide the following information for each shipment 24 hours before a cargo is loaded on a vessel:

1. Manufacturers name & address (if not the exporter)

2. Name & address of the physical location where the goods were loaded into a container

3. Name & address of the container consolidator

Needless to say all sorts of penalties will be imposed for not providing this information.

Commentary: We are very optimistic by nature, and patient by experience. Bad times follow good times, and good times follow bad times....the circle of life so to speak.

So, unless you were a friend of Bernard Madoff, think positive and look forward to the good times that are coming!! People will at least keep eating.

In the meantime, bargains are surfacing and such opportunities should not be overlooked. Give us a call.

Lemon Oil: Although Argentina is experiencing the worst drought in 50 years, it appears the majority of the lemon production is in areas which have so far escaped the lack of moisture. At this moment in time all indications suggest a "normal" crop. With the fresh fruit market less vibrant than last year this COULD mean a record tonnage being processed. Keep watching this space.

Spearmint Oil: The main producing area of Henan Province in China is also experiencing the worst drought in 50 plus years. So far we have not heard of problems with the crop (which is 6 months away) but it could become a factor in the future.

Orange Oil: Slow demand has some processors pricing oil aggressively.

Lime Oil: Distilled lime oil, although off the earlier highs, seems to have stabilized at a level where buyers & sellers feel comfortable.

Cold pressed oil is still looking for support.

Grapefruit Oil: Demand has never recovered from the Hurricane of 2004. Even "bargains" are a tough sell.

China: The year if the Ox may also usher-in the year of lower prices as falling crude oil prices bring down the costs of most aromatic chemicals.

Demand for many Chinese natural essential oils remains sluggish.

January 21st, 2009

Commentary: The financial meltdown could be easily solved if we all switched to using Zimbabwe dollars. The current rate for exchange is 1US$=$50BILLION Zimbabwe dollars!

Orange Oil: The USDA plans to purchase 7.3 million gallons ($26 million) of Florida orange concentrate for domestic food assistance programs.

The deal was orchestrated by a US Congressional Representative from Florida ("who previously worked in his family's citrus business"). SURPRISE!

Unfortunately the USDA is not buying the accompanying orange oil.

China: Prices-particularly for chemicals-from the origin continue to show the effects of the global financial meltdown although we are beginning to see some demand re-appearing at the lower levels.

Any prolonged withholding of orders only lays the groundwork for a sharp rebound at some point.

January 26th marks the start of the Lunar New Year-the Year of the Ox. These days this holidays lasts as long as a week in China.

Cinnamon Leaf Oil: At this time of the year processing slows to a trickle.

Rosewood Oil: Although our supplier has been re-certified by IBAMA, catching-up on the backlog is proving to be a very slow and arduous task. It is still not possible to book new orders.

Just as aside, we read that the Smithsonian Tropical Research Center estimates that 32 million acres of rain forest disappear every year. Wow!

In this context it is worth repeating that Brazil (via IBAMA) has incredibly strict rules governing the felling and replanting of rosewood trees. The trees themselves are even monitored by GPS's attached to the trunk!

Indexes: Somewhat surprisingly the CHICO Flavor Index fell more dramatically in January than the Fragrance Index.

To Our Suppliers: Do keep us posted on market developments impacting availability and pricing of your products so that we can incorporate comments on the Market Update.

January 14, 2009

Commentary: A new year, another year older and new challenges await!

Within the essential oils business, we are likely to see a very different picture than last year. Many prices may come under pressure as the strains of the economic slowdown put the squeeze on everyone in the supply chain. Last year was a sellers market; this year the buyers will be back in the driving seat.

Beware: historically, dramatic price moves, as occurred last year, are frequently followed by equally dramatic moves in the opposite direction, before some stability returns. While we do not trade petroleum, the wild price gyrations that have occurred in that market demonstrate the type of pitfalls that could lie ahead.

In a market environment like this it is very often stockists (resellers) who lead the way; heir accountants’ tend to be rather aggressive in addressing any potential problems! The reseller community represents a large part of our supplier base and as such we are more than well placed to address, in complete confidentiality, both sales requirements and purchasing inquiries falling within this market sector.

Aromatic chemical prices will be impacted by the lower price of crude oil, while essential oil buyers will be less inclined to blithely accept supplier’s asking prices. So, challenges lie ahead but as usual, when the going gets tough, the broker gets going!

December 15, 2008

At this time of the year we usually make some predictions regarding market conditions for next year. Surprisingly, we have had complaints that our forecasts were not too accurate, so this year at great expense, we hired a gaggle of consultants and physics to take over this major responsibility. Their forecasts are given below.

1. Evangelical Christians propose that essential oils be certified as being prepared to Christian standards. The new certificate will be called Holyhalkosh.

2. A survey by the Anti-Disruptive League finds that companies using RFP's are paying 20% more than the rest of the trade. The rest of the trade expresses their thanks.

3. The global financial meltdown reaches a point where there is nothing left to melt.

4. Lemon oil trades at $2.00kg. Italy and Spain get a $48.00kg subsidy from the EU.

5. Orange Oil trades at $50.00kg. Brazil says at this price they are losing money.

6. Stephen Hawkins determines that a Black Hole is in fact a REACH filing cabinet.

7. Harry Potter joins the Board of IFEAT and Paris Hilton is awarded the Woman of the Year medal by the WFFC.

8. As ethanol loses it's appeal as an alternative fuel, President-elect Obama calls for increased production of Catnip oil.

9. The UK applies to become the 51st US state. Gibraltar over-runs Spain and Greek & Turkish Cypriots hold a love-in.

10. The US Federal Reserve stops paying interest on Treasury Bonds and instead opts to pay with Monopoly money.

December 9, 2008

Commentary: Once again a senseless and unwarranted terrorist act has occured. Our thoughts and prayers are with all those suffering.

We just cannot understand the mentality of those who are ready to kill totally innocent bystanders. It is however, worth noting that the leaders of the organizations that carry-out these acts are never physically invovled in the actual operation itself. Could it be that they don't have the beliefs that they so readily instill in their followers?

New Us Import Regulations: Come into effect on January 26th, 2009, which will require further information be made available prior to the loading of the overseas vessel. This will include:

The country origin
Ship to party
The consignee's EIN number
The container stuffing location
Consolidator's name and address
The commodity HSTSUS number

While it is not yet clear how this information is to be provided to US Customs, putting such details on the commercial invoice would not seem amiss.

As soon as we have more details we will post them here.

Prices: Many prices are drifting as buyers remain on the sidelines and work off their inventories. If history is any guide, this will eventually lead to volume replacement buying (and higher prices). However, determining when this might occur is an art form that few have mastered.

November 18, 2008

Indexes: both the CHICO FLAVOR INDEX and the CHICO FRAGRANCE INDEX retreated this month.

The movement of these indexes over a number of years can be reviewed by clicking on the tab at the top of this page.

China: Export rebates have been increased so most prices have been adjusted downwards.

OrangeOil: Orange concentrate futures hit a 4 year low last week as the Florida crop estimate came in at 10 million boxes more than the trade had been expecting.

Tangerine Oil: Chinese new crop supplies will be available next month.

Holidays: Thursday November 27th, is a US national holiday and many companies will also be closed Friday. We will of course be open on Friday.

November 13, 2008

From the pages of Ripley's believe it or not.....................The Federal Researve Bank of New York (ie the US central bank) has just employed the ex Global Risk Chief of Bear Sterns as a Senior VP in the Supervisory (Banking) Department. Yes, the Bear Sterns from whom the government took on its books $29 billion in bad assets and yes, the man whose job it was to insure Bear Sterns did not get into risky deals that could jeopardize the company, is going to oversee banks for the Federal Government.

Now we don't know anything about credit default swaps, cdo's or accumulators, and we are not Hardvard MBA's. Neverthelesss, we are capable of asking one simple question:

HAVE WE GONE COMPLETLY NUTS???

Commentary: Our political landscape has been radically changed by the election of President-elect Barak Obama. Only time will show how this pans out for rank and file citizens, and the economy at large.

For the moment it appears that all aspects of the industry are digesting the implications of the financial meltdown and trying to determine where the future will lead.

In the main sellers are trying to hold prices-citing higher costs-but such an augment, given the present global predicament, is likely to fall on deaf ears.

Menthol: Prices have come down quite a bit in recent weeks aided by a stronger US dollar and a weakened demand. Could this become a long-term trend?

The firmer dollar should favorably impact a braod range of import prices.

Orange Oil: A 52 million box shortfall in the orange crop in Brazil, and an expected smaller harvest in Florida, has so far only had a marginal effect on prices.

Actually, we read that as of September 30th, there were nearly 30 weeks of orange juice in inventory in Florida-the highest level since the end of the 2004 season. Does this mean more fruit will go to processing?

Rosewood Oil: FINALLY, the factory and their whole collection, production and exporting process has been re-certified by IBAMA. Shipments can now recommence. However, there is a big backlog of orders and these must be cleared before any new biz can be considered.

October 30, 2008

Commentary: As every day brings news of the latest financial calamity, we become cautiously more optimistic about future developments. The reason? The sooner all the problems are exposed, addressed and resolved, the sooner we can all concentrate on new opportunities that have been created.

There is a silver lining at the end of every rainbow (even if it takes some time to be seen)!

Aromatic chemicals should certainly benefit from the dramatic fall in crude prices.

Hazmat Shipments: All shipping documents for goods classified as IMO Hazardous, must include a Dangerous Goods Declaration. Failure to do so can result in expensive problems with US customs etc.

Lemon Oil: The Bears seem to have slight edge at the moment.

Rosewood Oil: Everything we are hearing suggests the IBAMA log jam (no pun intended) may begin to free-up soon. We are hoping that on this occasion our optimism is rewarded.

Mangoolie Oil: As the crop approaches initial tests confirm that the new oil will have a maximum AR content of o.oo1 parts per billion. Such a good quality is likely to be unacceptable to most buyers.

Menthol: Prices continue to drift down. Is this the beginning of the long awaited correction.

Holidays: November 27th is Thanksgiving Day in the US. All businesses will be closed. Many will be closed on Friday the 28th.

Do not forget to tune in live to our trading floor by going to our Home Page and, at the bottom, clicking "LIVE".

October 27, 2008

NEW STOCK MARKET TERMS for 2008 and beyond.

CEO- Chief Embezzlement Officer.

CFO-Corporate Fraud Officer.

BULL MARKET- A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET- A 6 to 8 month period when kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING- The art of buying low and selling lower.

P/E RATIO- The percentage of Investors wetting their pants as the market keeps crashing.

STANDARD & POOR- Your life in a nutshell.

STOCK ANALYST- Idiot who just downgraded your stock.

STOCK SPLIT- When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER- A guy whose phone has been disconnected.

MARKET CORRECTION- The day after you buy stocks.

CASH FLOW- The movement your money makes as it disappears down the toilet.

INSTITUTIONAL INVESTOR- Past year investor who’s now locked up in a nuthouse.

PROFIT- An archaic word no longer in use.

YAHOO- What you yell after selling it to some poor sucker for $240 per share.

WINDOWS- What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.

October 22, 2008

Essential oil markets are quiet.......................history indicates quietness can eventually lead to a whole lot of noise!!

October 16, 2008

Commentary: As the turmoil in the financial and commodity markets continues, it is worth noting an old adage.

Markets can stay irrational longer than you can stay solvent!

Actually, we are now totally fed-up with the financial meltdown, Paulson, Bush, Palin, Brown, Obama and that woman from California too.

Therefore, next week we are giving IFEAT $500 million. We do not have $500 million, but neither does the US government so writing a check should be no problem.

We will insist upon the money being dispersed to the most needy in the essential oils biz. This injection of funds will enable Lemon oil to stay at $50.00kg. Sandalwood oil at $2,000.00kg and RFP programs can be expanded to every part of the industry.

US Mint Oils: Production in all sectors of this industry will be down over last season.

No price relief appears to be on the horizon.

Clove Oils: Typhoon damage in Madagascar and a short crop in Indonesia suggest prices are going to remain firm in the coming months.

Orange Oil: The first USDA crop estimate puts Florida production at 166 million boxes (down from 170 million boxes last season). The biggest reduction is in Valencia oranges.

Brazil also is forecasting lower production, but the direction of prices- for all oils & commodities-may be more influenced by the financial meltdown, than the normal supply & demand scenarios.

Grapefruit Oil: Here-again, total US production is estimated to be 34 million boxes, down from 38,500 million boxes last season.

Shipping: We read that it is possible to ship a 40ft container from Europe to Asia for $200.00!!! Although we don’t have any immediate shipments in the area, we’re thinking, nevertheless, of shipping goods from the US to Europe to ship to Asia….just because!

October 7, 2008

The IFEAT Conference in Montreal was, as usual, an excellent affair made even more enjoyable by seeing old friends and making some new ones. The global financial crisis did dampen spirits somewhat, but the warmth of our hosts, and the great work done by the –VOLUNTEER- Board of Directors, made for some relief.

A subject on many people’s minds was Lemon oil. The dramatic price increases seen over the last year or so have strained many a checkbook. With the Spanish and Italian new crops around the corner, the big question was/is: Where do we go from here?

Aside from the fundamental issues of supply and demand, there are two philosophies that have shown to have respective merits when trying to gauge the future direction of a market, namely:

1. that you cannot fight City Hall (ie. an established market direction) or

2. when everyone is thinking the market will only head in one direction, it is frequently the time a major reversal is at hand.

We did our best to speak to every segment of the industry to get a consensus. We did get agreement prices will come down-subject to Mother Nature co-operating of course. Where opinions diverged was on the WHEN (in the next 2 months or later next year?) and the VELOCITY (a steady decline or a steep and speedy drop?)

As we await the return of our crystal ball from the repair shop, we are collecting more information. We hope to be more precise in our information within the next few weeks.

It must be said that the financial crisis, the likes of which no one has ever seen before, could very well be the major factor in determining the way in which all commodity prices behave.

By the way, we often heard suppliers (of various oils) at the Conference referring to the cost of production as being the criteria to determining the selling price. In fact demand (or lack of it) is the only engine that drives prices.

One final comment……………..we are proud members of IFEAT and consider the annual conference to be an invaluable marketing tool.

Like the approximate 600 of the IFEAT members and accompanying persons, we pay fees required to attend conferences.

Many IFEAT members who attended the Montreal Conference could not help but notice the number of shameless, non-registered, non-paying, “just passing through town” attendees trying to save a buck.

We suggest that such culprits be banned from the next conference in Shanghai!!! Any seconds?

September 23, 2008

Commentary: The financial world is still in turmoil. Luckily, you are accessing the website of a company that can smooth the most furrowed brow.....................

We do of course trade a wide array of products. Here is a summary of market developments following the recent financial crisis:

Helium is up.

Feathers are down.

Paper is stationary.

Fluorescent tubing was dimmed in light trading.

Knives were up sharply.

Cows steered into a bull market.

Pencils lost a few points.

Hiking equipment was trailing.

Elevators rose, while escalators continued their slow decline.

Weights were up in heavy trading.

Light switches were off.

Mining equipment hit rock bottom.

Diapers remain unchanged.

Shipping lines stayed at an even keel.

The market for raisins dried up.

Coca Cola fizzled.

Caterpillar stock inched up a bit.

Sun peaked at midday.

Balloon prices were inflated.

Scott Tissue touched a new bottom.

Go to our Home Page to listen LIVE to all the action on our trading floor.

September 16, 2008

We just read two articles, one by Goldman Sachs exalting their stock-picking prowess, and the other reporting on the shortage of neuro–opthalmogists. Now we didn’t even know what neuro-opthalmologist was until we read the article but the two reports got us thinking…………..

As international essential oil brokers we have unrivalled access,

knowledge and experience.

This true statement of course has nothing to do with Goldman Sachs or neuro-opthalmolgists but since this website is our only forum for “advertising/marketing” do excuse us if once in a while we take advantage to promote how good we are!

Commentary: the meltdown in the US financial sector continues. Two major questions arise: when will it stabilize? And what downstream repercussions will there be to unrelated industries?

Rosewood Oil: The officials of IBAMA have visited the factory. They must now compile their report and issue a license before shipments can recommence.

IFEAT: A strike at the Fairmont Hotel in Montreal does not bode well. Will we have to pass thru picket lines? Will we have to show our Union card (the International Brotherhood of Brokers and General Good Guys)? Will we have to bring a packed lunch every day? Who will tuck us in at night?

We are really concerned.

Unpaid Board Members have spent many hours re-organizing the hotel accommodations for delegates. Our thanks go out to them. To further save money they will all be bunking together in the Sheraton. The sacrifices that are made in the name of IFEAT are boundless!

Italy: A heavy hail storm occurred in the lemon oil-growing area in Sicily yesterday. No news yet regarding damage to the fruit, if any.

September 10^th, 2008

Commentary: For many months we have been reporting ever-higher prices for virtually all oils. Suddenly crude petroleum prices have dipped-along with many other commodities-the US$ has strengthened, and the economic outlook remains bleak.

Are we now about to see essential oil prices stalling or, heavens above, retreating? Keep watching this site.

Holidays: China will celebrate National Day on October 1^st but most businesses will be closed through to October 8^th (further delaying shipments?).

Rosewood Oil: Our suppliers still await the inspection of the factory by IBAMA officials. No shipments can be made until IBAMA has approved the total collection, distillation and exporting process of the plant.

Orange Oil: While this remains one of the few products that did not leap in price this year, orange terpenes continue to be sought after. Prices have been reflecting this trend.

Corianderseed Oil: Although most sources are saying the crop will be smaller and therefore prices will be firmer, prices are now actually lower than they were a few months ago. Are we missing something?

Haiti: Once again this poor country has been hit by hurricanes with widespread damage and nearly 200 people killed. This is a country that just seems to always take one step forward and three steps back.

Our thoughts and prayers are with all those effected.

September 1, 2008

We do hope you find our new and improved website useful.

With the summer holiday season now coming to an end -and the IFEAT conference fast approaching- we expect considerable renewed activity within the essential oils market-place. Keep watching this site for details.

August 27, 2008

Regulations: Exporters to the US beware…on October 15th a new law comes into effect requiring container seal details to be reported to the authorities 24 hours before loading on the vessel. While shipping companies bear the primary responsibility for reporting this information via the Automated Mainfest System, exporters should make their local forwarders aware of this new regulation.

Holidays: Monday September 1st is Labor Day in the US and a national holiday. All businesses will be closed.

Lemon Oil: Spain is reporting that the new lemon crop starting in October is looking good and that they expect a 900,000MT harvest.

Italy will be closely behind them and they also say that-at the moment- everything is looking good.

Rosewood Oil: We read an interesting report published by “ Man and the Environment Institute of the Amazon” in which they assert that only 4% of the wood (all types not just rosewood) confiscated by IBAMA is used for any purpose.

They say the illegal wood generally stays in the hands of the violator as IBAMA is short of personnel, and lacks disposal capabilities. “Confiscation” obviously has a whole new meaning in this context.

By the way, do not confuse IBAMA with Obama!

Indexes: A big jump in DCC Flavor Index this month but interestingly the DCC Fragrance Index was down slightly.

August 12, 2008

Did you know Atlanta is the busiest airport in the world, with 89.4 million passengers arriving and departing annually?

Lemon Oil: Indian prices continue to edge higher.

For the moment prices have settled within a trading range. We have to thing that any buyers who were short have now covered the majority of their near-term needs.

However, it will be interesting to see how the market develops when summer vacations are over…..new crop supplies are still a long way off!

Garlic Oil: In a new twist, Mexican oil continues to sell at a premium to Chinese.

Mangoolie Oil: This is one of the few oils where prices, despite all the gyrations in the market, have remained relatively stable. However, we expect this to change as buyers re-discover the variety of applications it can be applied to; it is said to be ideal as a replacement for menthol cigarettes, and it has been proved to remove warts in minutes.

Litsea Cubeba Oil: The bad winter weather killed many plants. With the new crop (this month) expected to be 1/3rd to ½ smaller than last year, coupled with the natural escalation of production costs, it looks like we will be facing further price increases.

Teatree Oil: This is another oil heading for the stratosphere. Aren’t they all?

Clove Oil: Hurricane Ivan caused widespread destruction in Madagascar. We have an estimate of only 500MT of clove oil being produced this season (40-50% down from normal output).

Indonesian is predicting a clove crop of 2,500 MT but they estimate world consumption of clove derivatives to be around 3,500-3,700MT so add clove oils to the list of oils going to be in tight supply.

Dillweed Oil: “Tight” may be an under-statement with this oil!

Pennyroyal Oil: Too much rain??

August 6, 2008

Commentary: The summer doldrums are with us. While the term maritime, related to the effect of the Intertropical Convergence Zone, it also very much applies to trading markets in general.

August is traditionally a big vacation period both in the US and in Europe. However, as mentioned in an earlier Update, this is also a major harvesting time; the seeds of future problems often appear at the latter part of the summer. Computer-driven buying programs generally take a rest during this period as their owners head to the beach, meaning timing-wise, buying can get condensed, aggravating any shortage problems which have developed.

Don’t expect the arrival of new crop supplied to radically change the pricing picture….crude oil prices, reduced oil-plant acreage and the weak US$ all point to prices remaining firm.

Arvensis Peppermint Oil: Every year around harvest time, India experiences problems that threaten the amount of crude oil/menthol that can be produced. Rains are the problem this year and, although extensive damage has occurred, the numbers we have heard do not seem to support the raging bull market.

Having said this, Indian speculators have time and time again proved themselves to be more than capable of maintaining high prices, even in the face of bearish fundamentals.

Rosewood Oil: As State & Federal IBAMA official s vie for the role as Bureaucratic Kingpin, more delays in getting production/exporting approvals are occurring.

The idea of conserving and replenishing the rain forest is a wonderful idea, and the Brazilian authorities have done a great job policing the whole rosewood process, from replanting, tracking tree felling with the GPS’s and following the trail to the rosewood factory and to final export (this includes the sending of samples).

We just wish the procedures could be expedited!

USA: It looks as though the negotiations with the West Coast longshoremen’s union have been successful, averting a potential strike (chaos for Asian imports!)

Meantime, freight rates from the US (including oil surcharges, BAF and other incremental charges) continue to increase. Hazmat freight in particular is very difficult…..most oils are Class III Hazardous, but this does not stop them being as carefully scrutinized as explosives. The Al-Qaeda crowd can take satisfaction in knowing they have been responsible for creating a whole new army of bureaucrats to look after our safety & security!

July 22, 2008

Commentary: stretching our memories, it must be close to 15 years ago since we last faced a bull market in the essential oils industry (in fact many have grown-up in the business thinking that prices only ever go down!). However, even that pales next to the present situation where literally every oil is not only firm but short, and looking likely to remain tight for sometime.

Crude oil prices are not going to revert to $30.00 per barrel, and probably not even to $100.00 while the us$ remains so weak, and this is what makes this market condition so different to previous high-priced times.

We once again refer you to the comments in our last Market Update.

Of oils in the mainstream of usage only Orange and Grapefruit so far remain unaffected by the upward price movements. Moreover, if you can switch your Lemon oil usage to Garlic oil we can make you some very competitive offers!

Packaging: don’t forget that all wood packaging materials must conform to ISPM 15. Failure to comply can result in major delays and large expenditures.

China: the Chinese authorities have put numerous restrictions on the movement/shipment of goods while the Olympic Games are in progress. Most will probably be lifted after the Games end, but it is unquestionably going to take a long time for factories to gear-up and clear the backlog of orders. In other words, we are likely to see spot shortages of many Chinese products for sometime to come!

Orange Oil: as mentioned above, this oil has been largely unaffected by the price spiral, despite the continued interest, and firm pricing, for orange terpenes.

We await the news which puts orange oil on center stage again!

Dillweed Oil: US oil is virtually unavailable and altho the East European new crop should be harvested by the end of this month, supplies are likely to disappear very quickly.

Cinnamonleaf Oil: prices have been contained within a range recently that buyers have found conducive to purchasing.

Sandalwood Oil: in contrast, the price of this oil has sent most buyers- other than fine fragrance manufacturers and India users-running for the hills (never to return?).

Egypt: big declines in the production off most oils are being reported, particularly for cumminseed oil and marjoram due to the substitution of alternative crops such as wheat. Geranium oil production is projected to be around 80 metric tons, down 25-30% from last year.

July 14, 2008

COMMENTARY: For most essential-oil bearing plants, the harvesting season is fast approaching. Already the “noise” of impending doom and gloom can be heard (as mentioned below). For those of you going on vacation we always recommend you take your laptop to the beach so that you can keep abreast of the latest developments via this website!

Arvensis Peppermint Oil: Rain or no rain, monsoon or no monsoon, the predictions from India are always the most dire as distillation time approaches/gets going. Let’s hope that the present situation does not develop into another “off-the-charts” debacle.

US Mints: “Off the charts” could very well apply to these oils this season.

Lemon Oil: Italy & Spain are next in line for new crop oil but their harvesting time is still many months away. In the meantime, we only see prices (of oil, terpenes & washed) remaining very firm.

Lemongrass Oil: Prices edge higher with demand keeping pace.

Corianderseed Oil: While there does seem to be a general consensus that the crop is looking good, there is divergence of opinion as to what this will mean to the oil market. The bulls say the spice trade is going to take the lion’s share, leaving minimal quantities of seeds for distillation. Time will tell.

Lavender Oil:The growing area in China experienced a week of frost and a good percentage of the crop was damaged. One exporter predicts only about 10 tons of oil will come to market this year.

Haiti:Both Amyris oil and Vertyvert oil remain in tight supply, with prices continuing to firm. Petroleum price increases are taking their inevitable toll on all prices in Haiti and this could lead to social unrest - as has occurred in a number of other countries recently.

June 20th, 2008

COMMENTARY & BUSINESS ALERT: There are many causes for the higher prices of essential oils & chemicals, including a weak US$, urbanization and of course, the escalating price of crude petroleum. However, a new and potentially far more serious factor is now at work………a global food shortage!! This is a very real threat that likely will not go away in the near future.

Soybeans are sighted as one crop- although any food crop qualifies-which is already displacing production of essential oil-producing plants. After all, what farmer, when faced with a limited/costly food supply, will not switch to a crop that he can potentially eat, and also receive a better financial return?

This development must be seriously considered by anyone using essential oils….the days of Walmart-style buying (ie a 10% cheaper price for every new order) are gone forever.

We firmly believe that safeguarding the supply source by paying a price which reflects this new dynamic, will become the paramount concern for our industry.

We also foresee that water is going to become a much bigger factor in all our lives. Only 3% of the earth’s water can be used as drinking water!

Orange Oil: A Reuters Report is laying the groundwork for a smaller Brazilian 2008/9 orange crop siting poor weather effecting first blossoming, and tree-stress following two consecutive large crops.

Expect Brazilian exporters to make buyers very aware of this.

Cinnamon Leaf Oil: Suddenly prices have firmed by 9%.

June 16, 2008

COMMENTARY: Although some think crude petroleum could go to $150-200.00 per barrel, one must assume that consumption is slowly decreasing as prices have escalated.

To what extent this will impact prices remains to be seen but, it is always good to remember the trading adage “ sheep get sheared, bulls make money, bears make money and pigs get slaughtered”.

Lemon Oil: Once again one of our December 20th 2007 predictions has become a reality……………lemon terpenes are more expensive than lemon oil! Well, actually this is not quite true, but it would have been if oil had not risen faster and higher.

Crude Arvensis Peppermint Oil:The new crop is projected to be around 40,000-50,000mt (and Indian shippers even say this won’t bring the price down!).

Surely, it wasn’t too many years ago that 20,000mt was considered a huge crop?

Separately, we hear all the Indian Mentha trade is on strike! We are thinking or doing the same.

Vanillin:Prices are firming as the supply from China dwindles.

The Olympic Games-and the attending restrictions being placed on Chinese manufacturers- could create a lot of bottle-necks in the supply chain.

Corianderseed Oil:We hear the weather has been very favorable to the new crop. However, demand and prices will determine how much will be used as seeds (for the spice trade) and how much will be distilled. Rain during the harvest time would likely result in more oil being produced.

At the moment spot stocks of oil are very limited and prices remain very high.

Mint Oils:There will be little carry-over of US Spearmint oil and Peppermint oil also continues to challenge historical highs.

May 29th, 2008

COMMENTARY: The word “corruption” is sparsely used by the media in fear of upsetting the countries where this practice is widespread.

The problem is that with corruption comes economic stagnation…the fat cat’s don’t like the status quo changing! A look at some of the indexes and maps on the website of Transparency International ( www.transparency.org) confirms this.

In the main it is politicians who lead the way in this illegal activity………..power does indeed seem to corrupt. It comes in many forms and in some areas is almost institutionalized.

On this note, it is amazing to think that with the world in the grip of a food shortage, US politicians can still pass legislation that pays farmers not to grow crops!! It may not be criminal corruption, but it certainly is morally corrupt.

Indexes: once again the DCC Flavor Index and the DCC Fragrance Index moved up in May. With everything that is going on in the world today, it’s tough to imagine when this ever-upward cycle will end.

Lemon Oil: In our predictions for 2008, published on December 20th 2007, we jokingly suggested Brazilian orange oil exporters had coached Argentinean lemon oil exporters in the art of extracting the highest prices.

We cannot say this actually occurred but, given the state of the resale market, for sure Argentinean exporters will be aiming for the moon when they do start offering new crop oil in earnest.

Re-formulation is always mentioned as the force to contain prices but this is easier said than (quickly) done; lemon oil is not grapefruit oil!

Magoolie oil has been suggested as a potential substitute but the lack of any citral, or indeed any useful citrus components, makes this a difficult proposition.

Aniseed Oil: Prices have advanced as supplies from China are reduced to a trickle.

Shipping: The weak US$ is increasing US exports, at the same time as fuel costs continue to rise and consolidations occur in the shipping industry. To conserve fuel ship’s are no longer “steaming full ahead” meaning not only is booking freight difficult, but the actual voyage time is now longer.

April 30, 2008

COMMENTARY: The weak US$ is having one definite effect…..exports are surging! As a result, containers and freight space, are becoming more difficult, particularly for hazmat products. Overseas buyers may encounter some delays in seeing their purchases shipped.

Lemon Oil: We saw it coming months ago (the shortage and higher prices), and it has arrived - with a vengeance!! We still think historical highs could be tested…………..there is just not enough fruit available to process; in fact even processing-quality fruit is being moved into the fresh fruit market in some less pernickety areas.

There has been a steady stream of major buyers visiting Brazil & Argentine this month, just co-incidentally to discuss lemon oil purchases!! When buyers beat the doors down, expect sellers to raise prices even faster and higher as their dreams of retirement and carefree living begin to look very attainable.

However, only now will the true cost of having a computer system which generates “buy” signals based on historical sales and other computer-nerd methodologies, become apparent!

Lemon oil byproducts -terpenes & washed- are, if anything, more scarce than the oil; everyone wants to “stretch” their limited quantities of oil.

The latest estimate of the Argentine lemon new crop is 700-750,000mt.

Next year???????? Keep watching this space.

US Imports: Additional regulations are coming involving the acquisition of even more information…….and more paperwork!. The latest Importer Security Filing- when fully enacted – will require overseas exporters to supply the following information for each shipment:

· Manufacturer or suppliers name & address

· Container stuffing location

· HTC number

· Consolidator name & address

We will advise as more specifics become available.

April 23, 2008

COMMENTARY: We have read that the largest Swiss Bank-UBS-has written-down (surely this means “lost”?) $37 billion!

Our deals tend to be at a level where writing-down $37 billion would be a little difficult but, even so, two questions come to mind: 1. How could you lose such a sum of money (in a very short period of time) when you have dozens (hundreds?) of risk managers on the payroll and, 2. How do you stay in business after such a hit?

We are just humble brokers so we don’t have the answers. What we do know-and this is written into our corporate bye-laws-that facing any losses over $ 1 billion we should immediately remove ourselves to Winhoek, Nambia where we would service our customers and suppliers without the inconvenience of going to jail. We are registering the email address info@brokersontherun.com.na just in case.

Lemon Oil: With no new crop offers from South America-and only very bullish comments on the size of the crop-prices in US$ continue to head higher.

For Europeans the pain is not so great because the Euro is so strong against the US$. However, we cannot help thinking that the weakness of the US$ has been overdone. The underlying (poor) economic situation in Europe does not seen to justify an exchange rate of US$ 1=1.60 Euro.

In fact, we could envision a major turn around at some point (of course we don’t know when, which is the beauty of making economic forecasts when we know little about the subject!)

Rosewood Oil: One minute logs are available and production is underway, the next minute new regulations are introduced and everything grinds to a halt again.

Shipments are months behind schedule.

Lemongrass Oil: The poor weather in India earlier this year effected the plants and new crop (My/June) prices have been marked-up to compensate.

Hazardous Shipments: We have noticed that some foreign exporters are shipping hazardous goods as non-hazardous. This is not only extremely dangerous but can also lead to huge fines and even seizure of goods.

Saving a few dollars on freight could become a very expensive exercise.

April 14, 2008

COMMENTARY: We have frequently complained about how many buyers deviate from the agreed payment terms and stretch out payments to an unwarranted extent.

With this in mind we are delighted to report that a CAD payment has just been made “on first presentation of documents”! It must be a first.

We are just hoping that it was not a mistake and that payment for the next shipment will be doubly delayed.

Lemon Oil: The historically low prices in 2003-4 unquestionably stimulated demand, as can be seen from US import statistics.

The problem is that historically low prices almost always result in an eventual violent reaction in the opposite direction.

This is certainly the case with lemon oil. We still do not see any factors which might in the short term contain prices.

Buchu Oil: In contrast to lemon, this oil has suffered the reverse fate………high prices stifled demand yet, at the same, encouraged new plantings.

As a result prices are falling and buyers are heading for the hills.

Aniseed Oil: The snow storms which hit southern China this winter seem to have damaged the plants to the point where much of the crop is not suitable for distillation. Prices are of course reflecting the development (however, stretching the brain cells brings back a memory of a high $100.00+ for this oil. So, no need to worry!)

Tea Tree Oil: Prices have again moved in the face of restricted availability.

US Peppermint Oil: Here again, prices of all varieties continue to move higher although, for overseas buyers, the weak US$ does take some of the bite out of the increases.

April 2, 2008

COMMENTARY: We have been accused of limiting our humor recently. Perhaps our wit has been restrained, not only by the grim forecasts from Al Gore and the equally depressing political scene, but also our inability to name names. So, throwing caution to the winds, here is a name…

Jack Smith

We don’t know him but we wanted everyone to know that humor (however bad) is still alive and well here!

Lemon Oil: Argentinean producers now estimate that their upcoming lemon crop will likely be 25% lower than last year!

There is just no good news to report when it comes to lemon oil.

Cinnamonleaf oil: After drifting down, prices have suddenly reversed as collectors cut back the supply to exporters.

Garlic Oil: Both Chinese and Mexican prices are reflecting the increased availability from China. However, many Chinese lots still seem to have quality problems.

E-Mails: Our server will be upgraded on Saturday April 5th. We will be unable to send or receive emails from 7:00 AM to 5:00 PM.

March 21, 2008

COMMENTARY: As prices have moved higher over recent months, we have seen some buyers stepping back and working off stocks.

This only has the effect of building demand which, when released, can very well put even greater pressure on prices…….instinctively, when higher prices defeat the desire for lower prices, the ensuing rush to buy often propels prices to extraordinary levels.

China: The Olympic games start in August but it is most likely that business active in China will slow well before this date.

If you have any needs for Chinese goods, now is the time to think about purchasing.

A similar deadline occurs in June when the mandates of REACH become effective in European.

Lemon Oil: Starting back in the Fall of last year we began alerting readers of this site to the potential for higher prices. By January we saw all the pieces falling into place to confirm that indeed price relief was not on the cards.

Today the price continues to move higher. We would not be surprised to see historical levels tested in due course.

Corianderseed Oil: This is another oil that has been on a wild ride. With the availability from origin very limited (and much higher in price), cheaper resale lots are becoming harder to find.

Citrus Oils: Demand for the oil by-products of lemon, orange and grapefruit remains very strong. Orange terpenes are priced at almost at the parity of orange oil while the historically price relationship between lemon oil and lemon terpenes has broken down completely.

Interestingly, the lone oil missing strong demand-both for oil and terpenes-is lime. In fact Peruvian distilled oil is slowly edging lower

Indexes: Both the DCC Flavor Index and the DCC Fragrance Index nudged higher this month.

March 17, 2008

As we have mentioned before, nepotism is alive and well here. In this regard, and to help and improve your life style, you are now directed to the following websites:

www.shopjohnmurphy.com

www.ph-otos.com

www.peterharoldads.co.uk

COMMENTARY: The weak US dollar (and ever-higher crude oil prices) continue to negatively impact all essential oil prices.

As we have said on numerous occasions, price relief-as a general comment-is unlikely in the near future. In fact, even on a longer-term basis, it is difficult to think that conditions will permit a return to earlier price levels.

Lemongrass Oil: Indian oil for immediate shipment is unavailable. New crop supplies will be available for shipment from May onwards.

With exporters there reporting increased demand from overseas it looks as though prices are going to remain firm.

Florida Citrus Oil: The latest crop forecast slightly increases the orange crop from last month.

Demand for orange oil remains subdued yet (because of reduced folding) orange terpenes continue to be tight and firm.

Rosewood Oil: The latest requirement by IBAMA has been the registration of all vessels carrying the rosewood logs!!

Needless to say this latest bureaucratic hurdle has created a further backlog in the delivery of wood, production, sampling & shipping.

February 13, 2008

Lemon Oil: We don’t want to belabor the point but if you use this oil check your inventory and hunker down. It may be a long time before there is any price relief.

Actually, lemon oil is a classic case of how over-production=low prices=reduced production=an (eventual) dramatic rebound in prices.

In 2003 Argentine oil fell below $5.00KG (we even heard a deal was done below $4.00KG!!!!). Oh to be able to see into the future.

Haiti: Both amyris and vetyvert oils remain very difficult, with prices ever-higher.

Corianerseed Oil: The huge shortfall in the in the crop-as we reported some months ago-has propelled prices into the stratosphere. A purchase in 2002 would show a 7 fold return today!

Instead of mortgage-backed securities, perhaps Wall Street should be in contact with us!!

Citronella Oil: Prices in Sri Lanka have increased dramatically over the last months due to decreased harvest brought on by lack of demand. Its Chinese step cousin has also firmed in recent months.

Indexes: Both the DCC Flavor and the DCC Fragrance Indexes moved up again this month.

February 4th, 2008

China: Very sever weather conditions throughout China are straining the infrastructure and threatening crops.

Litsea Cubeca has been mentioned as one oil-producing plant that could be adversely affected by prolonged freezing weather. However, we have to think that many others could be endangered too.

Keep watching this space.

Italian Bergamot Oil: This is another oil that has been affected by inclement weather prices.

Indonesian Nutmeg Oil: Also in the same category, as is Canaga Oil.

Lemon Oil: Today’s Quiz Question: Will the ever-higher prices lessen buyers concerns about agricultural residues?

Florida: The latest USDA Crop Forecast reduces the Valencia orange crop by 2 million boxes (from the January estimate) and. At the same time predicts the grapefruit oil crop will be 10% lower than the 27,200 million boxes produced last season.

There are signs that perhaps Grapefruit oil prices have hit bottom. Supply may now be more in line with (the much reduced) demand.

January 30th, 2008

COMMENTARY: We were not invited to the World Economic Forum in progress in Davos Switzerland. Like many events we are not invited to (The UN, The Playboy Mansion, G7 meetings) our immediate reactions was…”It’s their loss not ours”.

However, in this case we are a little more than peeved. Our economic forecasts (at least in terms of the essential oils trade) have been spot on, something which most of the economists on the Elite Economic Panel cannot claim. Similarly, our down-to-earth recipes for change and development challenge the most well respected economic models (we actually believe what we write, even if it’s not correct!).

You are left, Dear Reader, knowing that you have access to a resource base second to none….and you don’t have to spend $3,000 per night for a hotel room in Davos (we can get you a first class room in Red Bank, looking over the Navesink River, for under $200.00 per night!).

What a Country! What a Company!

Holidays: Most businesses China will be closed from the 6th to the 15th of February to celebrate the Lunar New Year!

Lemon Oil: From Argentine we are now receiving reports that adverse weather may result in a crop 20-25% lower than last year!

Rosewood Oil: Shipments have slowed to nothing.

Getting ongoing detailed information regarding production and deliveries remains one of our biggest problems (the other being the hurdles created by IBAMA).

Lime oil: For our trade, cold pressed Tahiti oil looks expensive but for a processor it is the juice that is the driving force. With juice sales still a struggle, processing is down and in turn oil prices are unlikely to show any downward tendency.

Distilled oil prices, from both Peru and Mexico, remain with their recent ranges.

January 17th, 2008

COMMENTARY: looking back over our recent Market update postings, we notice that we seem to be repeating such phrases as “higher prices”, “smaller production”, “limited availability” etc, etc, etc, (this update is no different).

We are not trying to be negative or encourage any unnecessary purchases, but rather report on the one hand, facts as we see them and, on the other hand, highlight how most agricultural products (and certainly all products starting from petroleum base) are becoming more expensive in US$ terms…..and this trend, with a few possible exceptions, will likely continue! One only has to look at petroleum prices, exchange rates and urbanization to recognize that sellers, rather than buyers, will be more influential in dictating prices in the future.

Lemon Oil: The buyers who have been hesitating, thinking prices will drift off, may be disappointed….

With their crops down about 40%, Turkey has been selling their fresh lemons to Eastern Europe at very high prices. Spain’s crop is also down with little or no summer lemons (April-June) likely. They too have been filling the gap in the supply of Turkish lemons for the fresh market…..meaning less fruit for processing: in fact one processor is already stating they are sold out of oil until October 2008!

Italy is also reporting a much greater demand for fresh fruit so, once again, Argentina will be in the driving seat when their new crop oil becomes available in the summer. For the moment most Argentine suppliers are say their are sold out until the new crop.

Everything seems to suggest that major price relief for lemon oil buyers is likely.

China: Will biofuel/ethanol production become a factor in the cultivation of essential oil plants in China?

Citronella Oil: The Sri Lanka quality is only available spasmodically while one source in China is reporting production will only be about 300 mt this year, down from the normal figure over 1000 tons.

January 4th, 2008

China: Very sever weather conditions throughout China are straining the infrastructure and threatening crops.

Litsea Cubeca has been mentioned as one oil-producing plant that could be adversely affected by prolonged freezing weather. However, we have to think that many others could be endangered too.

Keep watching this space.

Italian Bergamot Oil: This is another oil that has been affected by inclement weather prices.

Indonesian Nutmeg Oil: Also in the same category, as is Canaga Oil.

Lemon Oil: Today’s Quiz Question: Will the ever-higher prices lessen buyers concerns about agricultural residues?

There are signs that perhaps Grapefruit oil prices have hit bottom. Supply may now be more in line with (the much reduced) demand.

January 30th, 2008

What a Country! What a Company!

Holidays: Most businesses China will be closed from the 6th to the 15th of February to celebrate the Lunar New Year!

Lemon Oil: From Argentine we are now receiving reports that adverse weather may result in a crop 20-25% lower than last year!

Rosewood Oil: Shipments have slowed to nothing.

Getting ongoing detailed information regarding production and deliveries remains one of our biggest problems (the other being the hurdles created by IBAMA).

Distilled oil prices, from both Peru and Mexico, remain with their recent ranges.

January 17th, 2008

Lemon Oil: The buyers who have been hesitating, thinking prices will drift off, may be disappointed….

Everything seems to suggest that major price relief for lemon oil buyers is likely.

China: Will biofuel/ethanol production become a factor in the cultivation of essential oil plants in China?

January 14th, 2008

Indexes: Only minor movement in both the DCC Flavor Index and the DCC Fragrance Index in December.

Petigrain Oil: Low temperatures, drought and historically low prices have all combined to put this oil in the spotlight. No offers are coming form Paraguay.

D’Limonene: Most Brazilian processors are saying they are sold out.

Tangerine Oil: New crop Chinese oil is now available in limited quantities.

Garlic Oil: As Chinese exporters scramble to offer ever-lower prices, Mexican oil has attained wider and ongoing support.

Rosewood Oil: Supplies trickle out but not at a pace to keep abreast of demand. A breakdown at the factory is further complicating matters.

Tahiti Lime oil: Brazil is reporting they will have a much-reduced and late-crop this season. Mexico may be capable of filing some of the gap.

December 20th 2007

WITH THE NEW YEAR FAST APPROACHING, WE HAVE AGAIN RETRIEVED OR CRYSTAL BALL FROM THE REPAIR SHOP IN AN EFFORT TO PINPOINT THE MAJOR EVENTS WHICH MAY IMPACT OUR INDUSTRY IN 2008.

OUR PREDICTIONS FRO 2007 PROVED VERY ACCURATE. WE HOPE THE SAME WILL APPLY TO 2008.

1. Grapefruit oil rebounds to $90.00 per kilo; Japan re-exports the oil purchased in 2004.

2. Patchouli oil from Uganda replaces Indonesian oil as the industry standard.

3. IFEAT 2008 which was originally slated for Dubai, is moved fro Montreal to Naome, Alaska so that Russian & Eact European delegates can cut expenses by rowing across the Berring Straits. IFEAT 2010 is rescheduled to Diego Garcia.

4. Lemon terpenes become more expensive than lemon oil.

5. Brazilian orange oil exporters confirm they have been coaching Argentine lemon oil exporters.

6. China eliminates export rebates but moves the RMB v. US$ exchange rate up to compensate.

7. Agricultural Residues are found to promote hair growth, open blocked arteries and regenerate brain cells. The only drawback is the amphibian-like tail and gills that accompany the positive benefits.

8. Mangoolie oil usage is banned in Australiaafter abusers were found to be capable of jumping further than a kangaroo after ingesting only 10 gallons.

9. Stephen Hawkins declares REACH an unfathomable Black Hole.

10. Crude petroleum reverts to $30.00 per barrel and pigs are seen flying over Riyadh.

WE WICH ALL OUR SUPPLIERS, BUYERS AND FRIENDS HEALTH AND HAPPINESS FOR THE NEW YEAR.

December 6, 2007

COMMENTARY: Following many companies introducing supplier evaluation systems, we are thinking of instituting a "buyers deficient reporting program". It will cover such things as:

1. Asking for shipment before a sample is approved.

2. Paying late with lame excuses (check future updates for a list of the top ten).

3. Complaining because a comma is missing in the product description.

4. Holding a sample for three weeks, in a rising market, and then rejecting it based on odor.

5. Failing to send us a Christmas present.

6. Placing orders with competitors.

7. Asking us to complete paperwork that we don't understand and we can't explain.

8. Failing to return our telephone calls in a timely fashion.

9. Placing an order elsewhere because our price is 20% higher than another.

10. Forgetting our birthdays.

Repeated infractions could put you in violation of "the buyers rules of conduct".

Peppermint/Spearmint Oils: With harvesting in the US finished for this year, reduced acreage, lower yields and higher production costs all point to prices only heading in one direction.

China: It appears the government rebates exporters have enjoyed will finally be eliminated in January. Since these rebates total anywhere from 5-13% their removal will likely lead to some price increases.

Rosewood Oil: Once again shipments have slowed reflecting the continuing hurdles created by Ibama.

Geranium Oil: Chinese oil is off the recent highs.

Garlic Oil: In this instance Chinese exporters are falling over themselves to take the price lower. Buyers remain on the sidelines.

November 28th, 2007

Indexes: The DCC Flavor Indexes made a dramatic move upwards this month, propelled by higher prices for most of the oils in this category. However, Indonesian patchouli, Haitian Vetyvert & Indonesian cananga were the most prominent factors.

The DCC Flavor Index also was higher with the weakness of the US$, the primary cause.

Cinnamon Leaf Oil: With the main buying season behind us, prices drifted somewhat encouraging some renewed buying.

Petitgrain Oil: After 4 years of over-production and low prices, stocks at origin have disappeared. At the same time the harvesting season-which normally starts in October- has been delayed to December.

Oil from the new crop should be ready for shipment in January/February, but expect higher prices to prevail.

South American Palm Rosa also seems to be suffering from the same lack of demand ergo reduce production.

November 19th, 2007

Haiti: Once again the country - with lowest per capita income in the southern hemisphere - suffered another catastrophe with tropical storm Noel. More than 60 people died and thousands have been left homeless,

Production of vetyvert oil and amyris oil has ceased as plants remain under water and roads are impassable.

Lemon Oil: Spain is reporting the winter crop has been sold out in record time and the quantity of fruit for processing may be down as much as 30%.

A much greater percentage of Spanish fruit will go to the fresh market due to short crop in Turkey (which normally would be a major supplier of fresh fruit to eastern Europe).

These days it seems to be very difficult to get positive news regarding lemons.

On a similar note, the US desert lemon harvest is expected to be 50% lower than last season. The majority of the fruit-form both the desert and coastal areas - is expected to go to the fresh trade.

This global shift in the supply chain - where so much more fruit goes to the fresh market- ensures Argentina will remain in control of lemon oil prices.

Reach: As we try to understand the implications of this amazing legislation on our business, one question looms large:

Why have the Brussels bureaucrats focused on fragrances (which are put on the skin)

rather than flavors (which are ingested).

WHAT ARE WE MISSING?

November 8th, 2007

COMMENTARY: We are hoping that "alternative energy" sources would begin to contain the ever escalating price for crude oil. Now we read that prices for bio-fuels, solar, wind turbines, coal and uranium (for nuclear power generation) have all moved up to a point where crude oil at $100.00 per barrel still does not allow the alternatives to compete.

While all the alternatives combined only represent a miniscule fraction of the total demand for energy, they offered the only hope to loosen the grip of the oil cartel.

With the US Dollar defusing to firm-up, crude oil prices uncontainable and the unrelenting urbanization of the farming community throughout the world, any hope that prices in our industry (let alone others) would retreat, are now a thing of the past.

PLAN ON HIGHER PRICES - TODAY'S LEVELS NAT SEEM CHEAP IN 12 MONTHS

On a related note, we observe that the best buying decisions are made at the companies where the buying function is considered a strategic and vital component of the business, rather than a necessary evil.

Patchouli Oil: The price has now met the official criteria for having "gone through the roof"!

Haitian Vetyvert Oil: This oil has moved past the roof and into the stratosphere.

Orange Oil: Resale lots continue to compete with Brazilian offers.

Lemon Oil: Here again, resale offers are cheaper than origin, yet buyers remain on the sidelines.

October 24th, 2007

USDA CROP ESTIMATES: The first USDA crop estimates for the coming season look like this:

Florida oranges - 168 million boxes, a 30% increase over last season.

Grapefruits - 25 million boxes, down from 27.2 million boxes last season.

Lemons - 18 million boxes, about the same as last year (but with more fruit anticipated to go to fresh market).

The quantity available for processing, will be much smaller than last season. The effects of the devestating wildfires in California are still to be determined.

NEATSFOOT OIL: This oil is used for treating leather but it is not for the squeamish......it's made from the feet and shin bones of calves!

SPEARMINT OIL: The price differential between Chinese 60% carvone and 80% has widened to around $7.00 per kilo. Our records suggest the historical spread is normally $2.00- $4.00 per kilo. The present larger differential reflects a weakening of prices for 60%; demand (acually for both qualities) remains very tepid.

PATCHOULI OIL: De ja vu all over again as prices reach - and may even exceed - the heights of 1997. We just wonder whether such a repeat could push buyers into the "replacement camp" (we know that it is said there is no substitute for patchouli oil, but it's amazing how creative accountants can become when oils "go through the roof"!)

INDEXES: The DCC Fragrance Index moved up again this month to 9741. The DCC Flavor Index was down slightlyprimarily due to the easing of menthol prices.

October 11th 2007

We read a lot-the political, economic and social events which occur around the world often impact our business. We need to be in-tune with the market-place at all times.

The ultimate market-place for us (even tho we do not sell there) is the perfumery & flavor consumer trade (ie.perfumes & foodstuffs). It is therefore with great interest that we note (good pun!) that more perfumers etc are being sold via scratch & sniff inserts in magazines etc.

Our IT department is now working on putting such a capability on this website.......scan & sniff for fragrance oils and scan, lick & sniff for flavor oils. It will be a first!

COMMENTARY: We see the Perfumer & Flavorist published an industry size ranking in their August edition. Surprisingly we were not included. Something must have gone wrong!

IFEAT: many people have mentioned how the meeting areas in the conference hotel in Budapest were too small to accommodate all the delegates. Hopefully this fact will be taken into consideration as plans are made for the (re-scheduled) 2008 conference in Montreal.

Corianderseed Oil: On July 28th we stated that the hot weather had effected the coriander crop and that more price increases were likely. Definite can now be substituted for likely!

September 24, 2007

As we have said before, nepotism is alive and well at DCC. As a result we can, with great confidence recommend the following websites:

www.johnmurphyprojects.com for all types of original artwork.

www.travelnewyork.com for all New York and USA travel needs.

Indexes: Once again both the DCC Flavor & Fragrance Indexes have moved up this month....the latter quite dramatically. The weak US$ is unquestionably a factor.

October 1st: This is not only the day China celebrates Independence Day, it is, perhaps more significantly, the anniversary of the establishment of DCC. The essential oils biz has not been the same since!!

Vertyvert oil: Constant rains in Haiti since March have reduced yields and prices have reached record levels.

On a more positive note, conditions for the next crop presently look very good.

September 17, 2007

China: Virtually all exports of fresh garlic and ginger from China to the US have ceased due to the Chinese authorities denying export permits to shippers. This stems from the introduction of more stringent quality controls by the government following recent quality problems with many Chinese products (including contamination with illegal pesticides!).

Will this mean more garlic and ginger oil being produced??

Italy: All citrus production has been effected by the weather and the recent wild fires. Most fruit crops are projected to be anything up to 20% lower.

This will likely result in the redirection of demand to other sources, primarily Latin America, with the attendant effect on prices.

Weather: Although -so far- the US has avoided any catastrophic hurricanes this season, Shanghai, the largest port in China, is about to be hit by typhoon Wipha.

Keep watching this space.

Patchouli Oil: Where for art thou Romeo?

IFEAT: The annual conference starts this coming Sunday in Budapest. Christopher Hunt from our office will be attending and looks forward to meeting many old friends, and new ones too!

August 30, 2007

CASH FLOW ALERT:

The price increases which have occurred almost across the board over the last year are putting renewed focus on cash-flow....the art of keeping the money flowing in, ahead of the money flowing out.

With higher prices, more capital is needed to finance purchases which may only generate income a considerable time in the future. Companies often find bridging this gap very difficult and, with banks now scrutinizing loan applications more than every, extra diligence is needed to ensure no " fire-sales" become necessary. Having said this, we are of course fire-sale central so let us know if you need a fireman!

__________________

Spam (e-mail variety) is a nuisance, but SPAM (food) is something else entirely....... A visit to www.spam.com will confirm this. It will also enable you to expand your gastronomic expertise to a level you have only dreamt about.

Orange Oil: The projected large Florida crop is having no effect on Brazilian prices. Orange terpenes are now more expensive than oil an we forsee this trend continuing.

Patchoili Oil: Offers are scarce and the spot market is almost bare. Farmers are apparently limiting the amount of oil exporters can obtain.

Holidays: Monday September 4th is Labor Day in the US. All labor will cease for that day.

August 27, 2007

WHY.............

Don't sheep shrink when it rains?

Is the sky blue?

Do the largest companies take the longest to pay?

Did the Mayans end their calendar on December 21st 2012?

Do so many pirates have a hook and one eye?

Is Magoolie Oil so short?

Are boxing rings square?

do doctors call what they do a "practice"?

Do they put brail on drive-thru bank machines?

Don't you ever see a baby pigeon?

These, and many more vexing questions have kept us very busy this month.

Indexes: Both the DCC Flavor & DCC Fragrance indexes moved up again this month; IN FACT, FOR MORE THAN 12 MONTHS EACH MONTH HAS SEEN THE INDEXES RISE!!

Weather Related News:

1. We are still awaiting news on the impact Hurricane Dean may have had on the production of Pimentoleaf & Berry Oils.

2. Haiti seems to have avoided any serious damage from Dean.

3. Although there was a tremendous loss of life in Peru as a result of the earthquakes, most of the damage and fatalities occurred away from the Lime Oil production region.

4. In Europe, heat and the lack of moisture has been a major problem in many parts of Europe......Wildfires in Italy and Greece have devastated large areas.

August 16, 2007

COMMENTARY: " The Doldrums" hark back to the days of sailing ships and the lack of wind.

While we may now be in the summer doldrums there is no lack of news to keep the sails of the essential oils biz fully inflated...............

Citronella, patchouli, lemon, washed lemon, lemon terpenes, lime terpenes, rosewood, geranium, d'limonene, teatree and peppermint are just some of the oils that have been moving to higher levels.

We could very well see this list expanding in the coming weeks. Weather, exchange rates, and crude petroleum prices are all contributing factors.

Orange Oil: The well known private orange concentrate forecaster has just put the Florida orange crop at 198 million boxes.....70 million more than last year!! It seems the recovery in fresh fruit prices enabled more money to be put into crop enhancements, creating much improved yields.

Meantime, Brazil is bravely holding prices....perhaps a sign of increased demand (at higher prices) by resin manufacturers.This is going to reduce the availability of D'limonene in the months ahead!

Peru: Today's earthquakes are a major tragedy . Our thoughts and prayers are with all those effected.

August 13, 2007

COMMENTARY: France, Germany, Spain, Sweden, England, & Australia all have legally dictated annual holidays from 20 to 30 days. The US mandates zero vacations and a recent poll suggests the majority of Americans are quite happy to forgo a break from the stress and strain of an every-day job. We are not slackers (and the IRS is very pleased about this!).

Palmarosa Oil: Alternative - more profitable - crops have encouraged Indian farmers to cut back on the production of this oil.

Lemon Oil: Wildfires in Sicily, hot dry weather in Spain, and hot humid weather in New Jersey puts Argentina well and truly in the drivers seat once again.

We are hard pressed to think that any price relief is in sight.

Patchouli Oil: It is surprising - and often inexplicable(?) - how every few years the price of this oil suddenly "takes off". We seem to be at that point right now!

Menthol: The CMX has again managed to defy logic and move back up. Someone is making money but for every winner there are probably quite a few losers.

August 1, 2007

Grapefruit Oil: While we cannot say that we have been seeing a stampede to buy, we are tending to think that prices may be heading into a range where more interest may begin to surface.

Orange Terpenes: Demand seems to be almost outstripping the supply.....terpenes are now more expensive than Orange Oil suggesting either a reduction in folding/processing and/or increased usage.

Lemon Oil: Wildfires are still a problem in Sicily. As business slows for the August holiday period the full effects may only become clearer in a few weeks. However, tragedies like this generally create an enviroment where prices are propelled higher.

At the same time, the EU is debating reductions in agricultural subsidies. Taken together we see no relief in sight for lemon oil prices.

Could lemon by-products become more expensive than the oil??

Vanillin: Production/environmental problems at the major producing factories in China will likely keep prices firm for some months.

China: Here are the revised rebate figures for some of China's major aroma chemical export products:

Vanillin: 13%

Ethyl Vanillin: 13%

Phenyl Ethyl Alcohol: 5%

Coumarin: 13%

Methyl Cyclopentenolone: 13%

Rasberry Ketone: 13%

Methyl Cedryl Ketone 80%: 13%

Must Ambrette: 5%

Musk Ketone: 5%

Aldehyde C-14: 13%

Gamma Dodecalactone: 13%

Maltol: 13%

Ethyl Maltol: 13%

Isobornyl Acetate: 13%

Methyl Salicylate: 5%

Camphor DAB-6: 5%

#9 Reason For Using Our Services:

We are just REALLY nice people!!

July 26, 2007

COMMENTARY: Southern & Central Europe have been experiencing a very hot & dry summer. Although not one of the largest essential oil producing regions (aside, perhaps, from lemons) any disruption in the supply-chain can create problems, particularly where " specialty" oils are concerned.

Expect more news regarding limited oil availability from this area.

Actually, it is fortunate that no oil-producing plants are grown in Nevada.....last week temperatures in some parts approached 55C!!

Indexes: The DCC Fragrance Index took a big jump this month as nearly all the oils in the sector moved up. The DCC Flavor Index also advanced by 3%. The weak US$ will likely keep prices trending higher.

Rosewood Oil: Ibama continues to be the biggest hurdle to getting oil shipped from Brazil. In fact, we have had no shipments for many weeks.

Corianderseed Oil: Low prices for Corianderseeds reduced plantings which, coupled with recent high temperatures and limited moisture, have resulted in a seed crop probably 50% lower than last year.

Oil prices are already up 30% over sales of the last crop and all indications suggest further increases are likely.

Spearmint Oil: From China we are advised that heavy rain during the harvesting damaged some plants and has reduced the yield. One exporter is projecting the present crop will yield around 300m t of oil as opposed to earlier predictions of 400-500mt.

# 8 Reason For Using Our Services: Because we are dealing with every segment of the market....producers, exporters, importers, speculators, distributors, your direct competitors...we have an information base second to none; After all, if you speak with a competitor the likelihood of your getting a factual story is most unlikely. We, on the other hand, can balance information from one source against information coming from many different - diverse - directions.

This Web Site Market Update provides unique insights into market developments and the future direction of prices.

July 11, 2007

COMMENTARY: We are now heading into harvesting time for many crops around the world. It is also a time for vacations in many parts so - once again - we urge you to take your laptop to the beach so you can keep in touch with our Market Update.

So far we have not heard of any major problems but with Mother Nature, one can never say never. Keep watching this space!

Garlic Oil: The price for Chinese oil has now dropped by almost 50% in the last two months. The end is not in sight.

American Mints: The demand for Ethanol has encouraged more farmers to replace mints with corn. Peppermint acreage is estimated to be down 14%.

Similarly, the reduction in stocks of Spearmint oil in the Reserve Pool will likely provide the fuel to keep prices very firm.

Clove Oils: Indonesia is reporting the potential for a bumper clove bud crop but in turn this apparently means less dried leaves for the distillation of Cloveleaf oil.

The cyclone that hit Madagascar in March has curtailed clove oil production there.

#7 Reason For Using Our Services: All our dealings are confidential.....letting the market-place know that you are short, or that you have lower-than-standard quality products to sell is not good for your business or reputation. If we act as principals the other party to the deal has no idea who the counterparty is. Again, since we also buy from many of our buyers, we not only have the ability to offset payments ( a factor which can be extremely important on occasions) but also engender a much closer relationship with the both the supplier (buyer) and buyer (supplier).

June 22, 2007

It used to be that kosher was a major requirement in New York, but as can be seen from the photograph below, things do change:

China: Although details are still hazy, it looks as though the reduction in the export rebate will be applied starting on July 1st. Reducing the rate to 5% will effectively mean an increase in costs of 8-9% for most oils and aroma chemicals.

Lemon Oil: Some Argentina processors are suggesting that much of their production is spoken for while others are able to offer-But at price levels which still have buyers pondering.

California lemons are now going directly from the groves to the packing houses - rather than being sorted at the groves. This is slowing deliveries to the processors and in turn is creating uncertainties regarding the amount of oil which will become available.

Meantime, the demand for lemon oil by-products continues unabated. Supplies are very hard to find.

Indexes: The DCC Flavor Index moved up slightly this month to 9486 while the DCC Fragrance Index increased to 11529.

Vacations: Wednesday July 4th is Independence Day in the US. All businesses will be closed.

Many companies will operate with limited staff for all the week commencing July 2nd.

#6 Reason For Using Our Services:

As brokers we are very inexpensive and cost effective........we only get paid after we have made a sale, and the seller has been paid.

Conversley, we pay bills on time.....Accountants LOVE us!

Cash-Flow is King.

June 13, 2007

Memo to Dick Cheney: Stay in your cave.

Memo to Perfumers: Red Bank is as good as Cannes.

Memo to IFEAT: Are the Registration fees getting out of hand?

Memo to Tony Blair: What will George do without you?

Memo to Grapefruit Oil Buyers: Would frequent flyer miles help us make a sale?

Memo to the Do-Do Bird: You are gone, but not forgotten.

Memo to the EU: When the bureaucracy overwhelms the proliterate, the bureaucracy better look out.

Memo to Nicolas Sarkozy: We really are nice people, and we definitely like your food and women.

*************************************

Pimentoleaf oil: Demand has dried up. Prices are heading down.

Grapefruit oil: Prices are now at levels we have not seen since Hurricane “Charlie”. Buyers are still elusive.

Garlic oil: What goeth up, cometh down……….very fast!!!!

#5 Reason for Using our Services: Very often a producing center sells out…….no oil. However, there are always companies who bought prior to the stocks being sold out and many times we sold it to them!! In other words we generally know where to find (non-origin) resellers, not a mean feat considering that many be far removed from origin, and from your location!

June 6, 2007

US Peppermint Oils: Increased prices for fertilizers and better returns for alternative crops all point to much higher prices for all oils in this sector.

Onion Oil: Supplies of Egyptian oil have dried up.

Mexican Onion Oil: (Like Garlic Oil) is now in demand.

Menthol: Are we seeing the start of the long anticipated MCX meltdown?

China: On July 1st the export subsidy on essential oils & aromatic chemicals is scheduled to be reduced from 13% to 5%. It is to be assumed oil/aromatics priced in the US$ will increase.

# 4 Reason For Using Our Services: We buy products from many of the companies to whom we sell. If nothing else this guarantees us a hearing when we are trying to make a sale. After all, buying from someone who also buys from you makes for a doubly gratifying relationship!

May 24, 2007

Holidays: Monday May 26th is Memorial Day. All U.S. businesses will be closed.

Rosewood Oil: Ibama is on strike…. AGAIN! More delays.

However, it appears Ibama may split in two with a new organization, dubbed Chico Mendes, to oversee Brazilian natural reserves (presumable including rosewood oil). We await more detailed information.

Geranium Oil: Egyptian is a bargain compared to Chinese.

Pimentoleaf Oil: The price may be coming back to earth.

Sandalwood Oil: Indonesian prices have eased somewhat, but Indian prices still continue to advance.

Current levels have forced most “ smaller “ buyers to certainly cut-back, if not totally reformulate.

Garlic Oil: We read that in China stocks of dried garlic are being hastily sold in advance of the new crop. Oil prices should benefit when new crop supplies become available.

Weather: The National Weather Administration is predicting 10-13 major storms this season with 3-5 having the potential to be force 5 hurricanes (111MPH winds)!

Cinnamonleaf Oil: The USA remains by for the largest buyer of Sri Lankan oil. Here are the export figures for recent years:

2002 51MT

2003 77MT

2004 62MT

2005 109MT

Although we don’t have the 2006 figures yet, we imagine - if only in US$ - they will be close to 2005 given the firmer prices last year (and this!).

#3 Reason For Using Our Services: How to know the market and avoid being “ ripped off “? This follows on from #2 because we are in the market everyday, covering the gamut of essential oils & aromatics. An infrequent buyer needs an unbiased, informed, source to know what is reasonable and what is not.

Again, we are in the market everyday (rain or shine).

May 16, 2007

As we conduct our daily business we are constantly confronted with incompetence, indifference and downright idiocy. Perhaps it is a sign of the times but, whatever it is, it stretches our powers of comprehension.

We intend publishing some examples on this site, starting with a "winner" that occurred yesterday. This was the answer to a question we posed:

"Yes, our price is inclusive of ALL charges, except extra charges".

EH??

COMMENTARY: Firmenich buys Danisco.......Next?

Orange Oil: The Cargill Orange Processing Plant in Frostproof, Florida is closing. Obviously it was not economic-downturn-proof.

Hurricanes, fruit diseases, limited availability of fruit and real estate pressures were mentioned as the reasons.

Citronella Oil: Better returns from growing rubber & tea are sited as the reasons for the run-up in the price of chinese oil.

Yakima Peppermint Oil: Watch out......higher prices are coming!

Lemon Oil: A new phenomenon.......the way things are going byproduct prices may soon exceed the price of lemon oil!!

Indexes: Only minor changes to the DCC Flavor & Fragrance Indexes this month. Check the Index page.

# 2 Reason For Using Our Services:

Because we do not have inventory or forward unsold/uncovered positions we can speak objectively with every segment of the market........Importers, exporters, speculators, dealers, processors, producers, etc.

You may be able to speak with competitors but can you really expect them to be totally honest?? Similarly, it would certainly be counter-productive, not to say dangerous, for you to let competitors know your thinking on any given market situation.

We can speak with everyone, unfettered by a position to protect, yet with sufficient knowledge of the overall market to be able to separate " Fact from Fiction"!

May 9, 2007

Over the years we have been questioned regarding the extent of our services. For many it is difficult to understand the added value we bring to the sourcing, supply & marketing of essential oils & aromatic chemicals.

How can you stay in business when you declare buyers & sellers names on your contracts? What added value do you provide? We are a big company, with lots of buying power, how can you possibly help us? We know everyone in the business, you can't do anything we can't do ourselves.

In order to help understand what we bring to the table, we will periodically explain our activities in more detail.

So, in particular order here is the first.......

#1 Reason For Using Our Services

We have nearly 70 years combined experience in the essential oils industry and commodity markets (we started very young!!). This does not mean we have all the answers but rather that history (and market developments) have a habit of repeating.

Computers are excellent tools but the still cannot replace the human element. Being alerted that a purchase needs to made does not provide the indepth market knowledge that is vital to making a competitive purchase. Remember, we are dealing in agricultural products.....crop times, crop sizes and weather conditions are just a few of the factors that influence pricing.

If you review this Website Market Update over the years (we have been publishing it for more than 10 years) you will see that our forecasts on market trends have been very accurate. We will explain how we are able to do this in a future Update.

COMMENTARY: We read that a move is afoot in Austria to confer all rights of a human being on a chimpanzee called Hiasi.

We can think of many ways this could impact our industry.

Lemon Oil: Perhaps the current prices for terpenes give a good indication of the direction of the market for lemon oil.

Orange Oil: Resellers appear, for the moment, to be ready to price at levels which compete with origin.

The first tropical storm of the season is now forming off the coast of Florida (a sub-tropical cyclone).

Lemongrass Oil: Even as we approach the new crop Indian prices have advanced.

Geranium Oil: Chinese prices still edge higher.

April 26, 2007

COMMENTARY: As you will notice from many of the comments below, this is the start of critical times for crops. Planting has finished and farmers must now rely on the vagrancies of mother nature. Keep watching this space.

Lime oil: Mexico reports their upcoming lime crop will be slightly less than last year due to recent cold temperatures.

Lemon Oil: Argentine new crop prices are now in the market. It now becomes a case of who will give first....buyers or sellers. The main Brazilian shipper is saying they are sold out (already?)

Rosewood oil: Production is still seriously hampered by "gold fever". Shipments have slowed to a trickle.

US Peppermint oil: Although acreage is down this season, higher yields should produce about as much oil as last year.

Arvensis Peppermint oil: A new equation needs to be programmed into the computer......bumper crop = higher prices. Can it be true?

US Spearmint oil: Although production in individual growing areas may vary considerably from last year, it appears the overall total availability should not be too different from last year.

Indexes: Both DCC Flavor and DCC Fragrance Indexes moved higher this month.

April 10, 2007

COMMENTARY: We have frequently commented on how population moves from the countryside to cities impact essential oil production and pricing. At the same time, the Wal-Mart-Like goal of some buyers always wanting to buy lower is making many agricultural crops only marginally profitable.

Now add to this equation the increasing demand for bio-fuels and ethanol and you get less essential oil producing crops plus inflation as production of food crops also drops.

We remain convinced that on a long term basis essential oil prices must head higher to be profitable for producers and to be able to compete for land and workers.

Rosewood oil: Supplies have slowed to a trickle. In fact, just this week a Brazilian man finished swimming the total 3,300 miles of the Amazon River. We believe he may have been trying to find additional rosewood trees!

Lemon Oil: As suspected, new crop prices from South America are much above recently traded levels. Astute buyers have already made moves to ensure they are less effected by further increases.

Menthol: Indian exporters are reporting manipulation of crude mentha prices on the MCX. What else is new?

April 4, 2007

COMMENTARY: We recently added 2006 US Import figures to the Products page of this site. As usual there were some interesting numbers.........

· Cornmint oil imports were up 41%

· Onion oil imports were 50% lower than 2005

· Orange oil imports were down 30% (rather a surprise)

· Geranium oil imports fell 30% (but US exports doubled)

· Lime oil exports from the US also doubled last year

· Lemon oil imports at 4601mt were a record; US exports were up 16% over 2005

· Patchouli oil imports increased by 20%

· Bergamot oil exports from the US surged to 120mt while imports remained about the same at 69mt

Perhaps the biggest surprise was the increase in grapefruit oil imports to 509mt. Obviously the lack of any real production here enabled overseas suppliers to fill the gap (while buyers scrambled to reformulate).

Orange oil: The Brazilian new crop is presently estimated to be 335 million boxes, more-or-less in line with last seasons' production.

Eucalyptus oil: The worst drought in 50 years is being blamed for a reduction in Chinese oil supplies. The full effects of the drought - if it continues - will be felt in July/August when the trees have finished germinating.

Geranium oil: Here again, lack of water cut back the oil available from the first crop. The next crop will be taken in July/August.

March 29, 2007

Tangerine oil: We understand that most of the fruit from the recent Chinese crop went to the fresh fruit market. Hardly any oil was produced this year.

Magoolie oil: As the crop time fast approaches the often repeated question arises: "what is this oil?

Lemon Oil: Prices edge higher as stocks dwindle. Demand for terpenes remains unabated.

Cinnamon bark oil: A sudden buying spurt has propelled prices higher.

Zdravetz oil: One of only two essential oils starting with the letter z.

Disclaimer: This website is not confidential. You may proudly display it as a sign that you are dealing with only the finest companies.

However, any usage of the information container herein will require offers and/or orders to be placed with us at levels which ensure that we make a handsome profit.

The only exception to this rule is the passing of information to a so-called competitor (we of course assert that we have no competitors). This will require you to kill yourself immediately.

The views expressed on this website may not necessarily be the views held by David Cookson & Co., Inc., although we must admit this will be difficult for us to prove in a court of law.

March 22, 2007

COMMENTARY: Something is changing in the world of automobile manufacturing.....suppliers are refusing to lower prices and in fact some have stopped delivering materials that do not show a profit.

This is a theme we have raised many times.....our industry is primarily based on agricultural products, very often grown in poor undeveloped areas. In our opinion the Walmart model of constantly squeezing supplier prices is outdated and in today's environment is downright dangerous.

When producers do not make money they reduce production and, as Detroit is now seeing, consolidations, cutbacks and alternative outlets, have created a situation where fewer suppliers have the power to dictate prices.

In many countries virtual export monopolies already exist while in other areas the profitability of alternative crops (sugar and various other edibles for example) is just too tempting to ignore.

Bottom Line: Think long term, be reasonable on price and make sure you speak with us regularly.

Indexes: Both the DCC Fragrance Index and the DCC Flavor Index advanced in March.

Another sign that goods priced in US$ will likely continue to edge higher.

Rosewood oil: More problems.....unusually heavy rains this month followed an unusually dry February but, more significantly, many workers who previously transported the logs and ran the factory, have become gold prospectors!!

Production has slowed and no new biz can be booked for the moment.

March 19, 2007

COMMENTARY: Some years ago there was a movie called, "The Man with Two Brains". Now Intel has developed a new chip which has the equivalent of 80 electronic brains. In tests it has exceeded a trillion floating-point operations per second.

With such a chip we are thinking we will be able to dramatically increase the size of our biz without even hiring one more person. In fact, we could fire everyone and still have more brains than we do now. Whatta country!!

Cinnamonleaf oil: The price fell back but has quickly rebounded as renewed buying, coupled with drought conditions and new year festivities, has dramatically reduced collection/production.

Davana oil: The price escalation of a few years ago reduced demand and now availability has shrunk to the point where finding oil competitively priced oil is very difficult.

February 21, 2007

Snow and ice storms battered the East Coast last week resulting in our internet connection going down on Thursday February 15th. We think we received everything the next day but if you did send us a message that day do please resend it, to be on the safe side.

Also, our new telephone service provider has already created a problem by failing to install our out-of-hours message recording system. We hope to have it up and running shortly.

Good news...............Harvard physicists have brought light - which usually travels at a brisk 186,282 miles per second - to a complete halt by trapping a pulse in a Bose-Einstein condensate and then transporting it two-tenths of a millimeter to a second Bose-Einstein cloud!

This news, for those who employ quantum algorithms to calculate the speed which a payment will reach a customer after instructions are given to a bank, is progress indeed.

For the rest of us, trying to imagine two-tenths of a millimeter is more than sufficient brain-cell activity for a month.

We must also admit, we thought Bose-Einstein was an intelligent stereo system!

Rosewood oil: The next set of problems.........

1. Carnival

2. Striking Brazilian customs officials

3. Gold has been found at two sites in the rosewood oil producing area; some workers may move to panning instead of distilling.

Lemon Oil: Heavy rain has been falling in Tucuman,Argentina resulting in flooding. New crop oil will probably not be available until May. Early oil is usually greenish.

Indexes: Little change in February for either the DCC Flavor Index or the DCC Fragrance Index.

February 8, 2007

During the course of a month, we read a lot of market reports, speak to hundreds of people and receive thousands of faxes, e-mails and letters relating to the purchase and sale of the products within the scope of our activities.

Most market reports naturally - if somewhat covertly - promote the writers' market situation (long or short). We have no positions so we can objectively comment on markets as we see them.

As such, we are now taking our life in our hands to make some recommendations:

Buys:

Lemon oil - New crop supplies , when they finally become available, are not going to contain firming prices.

Orange oil - More fruit will be needed for the fresh fruit trade.

Lime oil - New crop pricing for distilled has now been established. Quantities will remain an issue. Selling juice concentrate remains a hurdle for processors cold pressing.

Vanillin - Limited availability from China.

Patchouli oil - The cycle of low/high prices has reached a point where distillation has been cut back.

Rosewood oil - IBAMA procedures continue to create delays.

Watch Closely:

Menthol - The only reason we are not saying "sell" is because of the timing of the price reversal.

Nutmeg oil - Producers are aiming for higher levels.

Eucalyptus oil - The reduction in distillation has caused prices to spike but whether this will hold remains to be seen.

Garlic oil - Only the very brave, or desperate, will buy Chinese oil now. Mexican (C-14 tested) remains a bargain.

Cinnamon bark oil - With large inquiries in the market, prices have already moved higher.

Sandalwood oil - We mention this only to highlight its unstoppable upward price trajectory; buying it is another thing entirely.

Sell:

Grapefruit oil - Actually, if you can afford to continue waiting....you might just end up as one of the few holders.

February 5, 2007

Menthol/DMO: As thoughts now turn to the potential of the next Indian mint crop, we are hearing that far larger tonnage than last year may be produced.

It is still early to make any meaningful predictions on the outcome (Indian crops tend to more prone to the vagrancies of weather and yields, than many other agricultural areas) but a dramatically increased crop would certainly have serious repercussions on prices.

Lemon Oil: The forthcoming Argentine crop is projected to be "normal" but there are two factors that are likely to impact the price direction: 1. The lack of carry over (in previous times a price stabilizing factor) and 2. Demand for fresh fruit.

Lemons grown in California are primarily destined for the fresh fruit market but with the recent freeze reducing availability there, other countries (Argentina, Spain, Italy, South Africa, etc...) will need to satisfy this demand. This will reduce the amount of fruit available for processing.

Indonesia: Extensive flooding in Jakarta could delay shipments, particularly as more rain is forecast for the next two weeks. With over-(and uncontrolled) development being sited as the primary reason for the flooding, the effects could be long term.

January 29, 2007

FREEZE ALERT!!!!!!!!

TEMPERATURES IN CENTRAL FLORIDA HIT 30F LAST NIGHT AND FURTHER LOW TEMPERATURES ARE FORECAST FOR THE COMING DAYS.

Holidays: The Lunar New Year, the Year of the Pig (Ding Hai) starts on February 18th this year. Many Chinese companies close for a week or more for this festival.

Make sure you are covered for Chinese oils/aromatics now in case deliveries are delayed.

Rosewood oil: New IBAMA officials from Brasilia - unfamiliar with the export procedures governing rosewood oil - are slowing down the dispatch of oil from Manaus.

January 24, 2007

COMMENTARY: We have been surprised at the tepid market reaction to the freeze in California. While specific figures are still not at hand, indications suggest that 70-90% of the orange crop has been effected, and 30-40% of the lemons.

In previous times - before accountants and computers controlled purchasing functions - one would have expected a very swift response to such distressing figures. Nowadays, the digestive-response stage is much more protracted.

Those who have acted on the news should find themselves in a favorable situation in the weeks and months ahead.

Indexes: Both the DCC Flavor and Fragrance Indexes moved up this month. A portend of things to come??

Lime oil: We are told the Mexicans are still pushing to buy large quantities of distilled oil from Peru. It is to be hoped that their interest reflects a need to cover a genuine supply shortfall, rather than it being a speculative move to push prices even higher.

It began raining in the growing area in Peru last Thursday. Rain is a great hindrance to the harvesting and transportation of the fruit.

Patchouli oil: Following a period of low prices, which discouraged production, prices are on the rise.

January 18, 2007

Orange oil: While California produces around 25% of the oranges grown in the USA most of the crop goes to the fresh fruit trade. As a result many orange oil users are not familiar with the limited oil that is processed in California (mainly navel).

If the dire predictions we have been hearing from ("70-90% of the crop may have been lost to the freeze") become a fact, the fresh fruit shortfall will have to be made up from other growing areas.

In other words, the need to satisfy the fresh fruit trade (a real money-making part of the business) will reduce the amount of oranges processed in other areas. This suggests that we may be seeing much higher prices in the coming months.

Lemon Oil: Although California is the primary source for US grown lemons, the volume of oil is miniscule in relation to Argentine. However, again, a shortfall in California will have a knock-on effect as better quality lemons from other areas will need to be diverted to the fresh fruit trade.

Users who have Californian lemon oil in formulas should already be thinking of ways to mitigate the effects of a downsized supply situation.

Lime oil: Distillation is in full swing in Peru. The price being asked is giving many buyers a headache of major proportions.

The sentiment expressed in the old adage, "What comes around, goes around" should never be forgotten!

Cinnamon leaf oil: Prices came off the highs but renewed buying -during this period of limited production- has propelled prices upwards again.

January 15, 2007

WEBFLASH

FREEZING TEMPERATURES IN CALIFORNIA COULD JEOPARDIZE THE STATES ENTIRE ORANGE CROP.

WITH CALIFORNIA ACCOUNTING FOR 25% OF THE US ORANGE SUPPLY, A DISASTER OF THIS SIZE COULD CREATE A SUPPLY PROBLEM OF MAJOR PROPORTIONS AND IMPACT PRICES FROM ALL ORIGINS.

KEEP WATCHING THIS SPACE.

January 11, 2007

Massoia bark oil: We hear that shipment have arrived which include oil extracted from bark other than massoia. Careful quality checking is recommended.

Orange terpenes: Demand is very steady.....prices are almost on par with orange oil!

Lemon terpenes: Hereagain, demand is outstripping the supply.

Patchouli oil: Prices have moved up but with spot stocks still competitively priced, buyers many not immediately follow origin.

Nutmeg oil: This is another oil where prices have been firming.

Rosewood oil: Although not so dramatic, prices of this oil are up also.

Grapefruit oil: Earlier this week we saw a do-do bird flying by our office with a grapefruit in its mouth!

Sandalwood oil: High prices seem to be impacting legal exports of sandalwood oil........10,000kgs were exported in 2006 as opposed to 15,000kg in 2005. It would be interesting to know how much oil is being illegally smuggled from India via the Middle East.

January 2, 2007

At the end of each year we make some predictions on future developments within the industry. We are a little late this year as our crystal ball was-again-in the repair shop. Nevertheless, here are all the insights you will need for 2007:

1. Large wealthy companies agree to pay in advance for all their purchases to compensate for their previous delays in paying.

2. Global warming enables lemon groves to be planted in New Jersey.

3. Kazakhstan is designated as the venue for the 2009 IFEAT conference. Borat will open the proceedings with a finger-puppet show and a discussion on the merits of using horse urine in the flavor & fragrance industry.

4. Lime oil is officially banned for use in soft drinks and Mexicans switch from limes to using lemons (from New Jersey!)

5. A record 500,000mt harvest of Indian arvensis mint results in a doubling of DMO prices.

6. The Brokers Hall of Fame is closed to membership, leaving DCC as the sole member.

7. A grapefruit tree is found in Indian River County, Florida.

8. Recognizing they have been making too much money, Brazilian orange processors cut all prices by 50%.

9. The FDA approves the use of ambergris from cloned whales.

10. The WFFC USA challenges the European WFFC to an arm wrestling contest.

We look forward to a stimulating 2007!

CooksonCo.com

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INSTITUTIONAL INVESTOR- Past year investor who’s now locked up in a nuthouse.

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