Update on Indonesian Essential Oils Situation (June 2017)


Rainfall Map Analysis, May 2017 Edited from www.bmkg.go.id

Rainfall Map Analysis, May 2017
Source: www.bmkg.go.id, translated into English

Rainfall Map Analysis, June 2017 Edited from www.bmkg.go.id

Rainfall Map Analysis, June 2017
Source: www.bmkg.go.id, translated into English

The Indonesian Agency for Meteorology, Climatology, and Geophysics predicted that dry/wet season pattern in the year of 2017 will be normal for many areas of Indonesia. Indonesia was hit by El-Nino (lower rainfall than normal) in 2015 and La-Nina (higher rainfall than normal) in 2016. Java has entered the dry season in May 2017. The low output of several essential oils last year will be recovered but we cannot expect high output as in 2015.

Clove Leaf Oil
The 2017’s Indonesian clove bud harvest will be very small. Clove trees need several dry months to trigger clove bud blooms. Many clove growing areas did not have dry months last year. Availability of fallen dry clove leaves in 2017 will be more than it was in 2016. However, it will be less than in 2015. There was a bumper crop of clove buds in 2015, and usually, there are 50% more of fallen leaves after bumper crop can be collected. The output of freshly distilled clove leaf oil is estimated about 3,500MT, slightly more than it was in 2016 but will not reach 4,500MT — as it was in 2015. The price of clove leaf oil which was firming up in the first half of 2017 will continue to firm up in the coming months until the new fresh distilled oil will be more available the last four months of 2017. The supply quantity will not fully satisfy the growing demand.

Patchouli Oil
The harvest of patchouli in Sulawesi was started in February and continued until June, before the end of Ramadan festive season. The wet year in 2016 made the non-irrigated patchouli field in Sulawesi grew well. The price has dropped significantly as inventories position along the supply chain is relatively high. Total output in 2017 is predicted to exceed 1,500MT again, with more than 70% output are from Sulawesi. The weakening price for almost a year may reduce enthusiasm of many farmers to continue the cultivation of patchouli. It seems that current market price has hit the bottom and has reached an unsustainable level in some growing areas.

Nutmeg Oil
There is no big driver to destabilize nutmeg oil supply and price in 2017. Crops from the plantation of nutmeg in non-traditional sourcing area, such as in Lampung, Southern Sumatera, fill the gap between supply and demand. Indonesia will have a normal production output, approximately 350MT oil in 2017.

Citronella Oil
Despite the enthusiasm in planting and distilling citronella by many new players in Indonesia, the prolonged wet seasons has made the oil yield less than normal. The price was firming up more than 50% because of high demand. Indonesia is predicted to produce closed to 1000MT of citronella oil this year. However, with less supply from China, Indonesian output will not be enough to satisfy growing domestic and export demand.

Other Essential Oils
Shortage of vetiver, cananga and recently cubeb oils will not be resolved soon.