In its August 1998issue, LEOSERV SA provided an overview of the U.S. market for essential oils that described many of the varieties in demand and their special uses (click here for article). This month, we provide an update of the U.S. market in 1997, which saw imports increase 27 percent over the previous year.

Essential Oils Production

There are many types of essential oils in production around the world, including naturally distilled and synthetically produced varieties. The world's major producer is China, which has seen its exports grow significantly since the 1950s. According to the Public Ledger, by the 1980s China's industry had grown to supply over 50 percent of the world demand for essential oils. However, the advent of new technologies and mass production made it easier for other countries to get involved. This resulted in large-scale production, experimentation with new varieties and product substitution. The result was that by 1993 prices had fallen to an all time low.

One variety currently undergoing increased production is orange oils, the majority of which are supplied by Brazil as a by-product of the orange juice-making process. From Brazil the oil is then exported to the United States to be used as an ingredient in orange-flavored beverages. Florida juice makers have also been producing orange oils as a by-product of their activities and it will be interesting to see what long term effect this has on Brazil's domination of the U.S. market for this product.

The production of synthetic oils is another result of new and improved technologies. Due to the inferior qualities of synthetic oils, however, natural extracts enjoy greater demand and command higher prices, especially when used as flavorings or aromatic ingredients.

The US market in 1996-97

In general, 1992-1997 saw fluctuating demand capped off by moderate growth, as imports approached 20,000 MTs in 1992 and 22,600 MTs in 1997, for an increase of 15 percent over the five-years. Figures show that 1996 imports were the lowest of this period, only 17,759 MTs, although the following year showed improved growth with imports increasing 27 percent (click here to see 1996 and 1997 imports by variety).

Despite what appears to be slow, steady growth in import value, the table below demonstrates that both the quantity and value of imports tend to fluctuate significantly.

The figure also shows that citrus-based oils (lemon, lime, orange and grapefruit) together made up 65 percent of all U.S. essential oils imports in 1997.

Orange oil is by far the largest essential oils variety imported to the U.S. In 1997, the volume of annual imports increased from 6,729 MTs to 11,434 MTs. This increased the share of orange as a percentage of total essential oils from one third to one-half, and contributed significantly to 1997's overall leap in total essential oils imports. Brazil supplied 88 percent of U.S. imports of orange oils in 1997.

Lemon oil is the second largest essential oils import in the U.S. In 1997, imports grew from 1,688 MTs to 1,951 MTs, an increase of 16 percent. Nearly two-thirds (61%) of lemon oil imports are supplied by Argentina. Lime oil, over half of which is supplied by Mexico, is the third largest imported variety. 1997 imports of lime oil were down 25 percent to 959 MTs from 1,272 MTs a year earlier. Grapefruit oil made a significant drop over the period from 258 MTs imported in 1996, to only 72 MTs in 1997, a decline of over 70 percent. The category of other citrus oils saw imports grow 16 percent from 265 MTs to 307 MTs.

Spearmint oil imports dropped from 401 MTs in 1996 to 242 MTs in 1997 or 40%. Likewise, peppermint oil imports fell 44 percent from 456 MTs to 253 MTs over the period. Two other important varieties are Eucalyptus and Citronella. Eucalyptus oils were the largest non-citrus variety imported to the U.S. in 1997, with imports of 604 MTs up from 407 MTs the previous year, a change of 33 percent. Citronella oils, another large import variety, fell 20 percent from 563 MTs in 1996 to 447 MTs last year. Other important varieties showing significant change last year were oils of rosemary, geranium, clove and cedarwood.