~ NEWSLETTER (AUTUMN EDITION 2004) ~

Helping  give the Children a good start in life…

Venus Enterprises Limited are the official agents for the Dominica Essential Oils & Spices Co-Operative Society Limited, for Dominica Bay Oil. Your continued orders not only help farmers manage their farms more efficiently, but also aid giving the children a good start in life and helps pay for their education.

As part of our commitment to keeping customers informed, we’ve enclosed a summary of how we see the market at the moment. If you’d like a price quotation, or to find out more about any specific product mentioned, please call us and we will be happy to help.

With crude oil prices having surged to record highs one must keep in mind the impact that oil has on many raw materials, as starter materials for the aroma chemicals industry; the most notable to have risen are phenylethyl alcohol, diphenyl oxide and methyl salicylate, to name a few. Many manufacturers of these type cheap products are finding their starting materials having trebled and out-pricing the finished product. The impact of this of course is the pressure on profit for the main producing area China, who is already finding strong competitive pressure from India as they try to reap the benefits of an expanding global economy, and, internal problems such as power shortages that cause short working weeks on production. This can only increase with the internal expansion of business, environmental and quality and safety issue on transportation, increased freight costs, etc.

With most commodities already performing well many buyers may well neglect them, which could be a mistake. Commodities are usually priced in dollars, so there is a currency risk. However, in spite of such risks commodities are potentially attractive. We feel there is the opportunity for new buyers to turn their attention to commodities, because of China and India’s, growth and because they are cheap.

One problem we do see relates to container shipping. Hazard class material and soaring demand, created by unexpected manufacturing business to China, has shown in many parts of the world that container shipping is growing too fast for its own good. Daily we hear of barges full of containers waiting to be unloaded for transfer to ocean-going vessels or the quays – often waiting two or three days to load or unload, hence surcharges or increases in charges. This in-turn causes shortages of containers causing delays in shipping, and therefore delays to consumers receiving much needed material in usual scheduled times.

~ BRINGING MARKETS INTO FOCUS ~

Amyris Oil:                            Reports show that production of amyris has resumed, although prices remain firm. Recent floods have not helped many of the Island's problems, but the political situation is looking more stable.

Aniseed Oil/Anethol:          Aniseed market fairly quiet during the summer months with prices remaining stable in both forward and spot positions. Buyers continue to buy on a hand to mouth basis. Current prices do still seem to remain attractive and is still worth the consumer's consideration. Anethol sales have been more active than the aniseed oil sales.

Bay Oil:                                  Origin has recently raised its base selling price, however, sales continue being made to traditional consumers.

Black Pepper Oil:                 Market continues to be competitively priced on Indian and worth consumers consideration. Sri Lanka oil is substantially higher priced.

Cassia Oil:                             Chinese new crop reports indicate a good sized crop. Market demand slow and prices remain very attractive.  With lower prices not anticipated in the near future we feel this product is worth consumers consideration.

Cinnamon Leaf Oil:              Market fairly quiet during the summer months with prices remaining stable in both forward and spot positions.

Citronella Oil 85/35:              Prices from China increased during July with distillers demanding higher prices, despite good availability from all the main exporting countries, i.e. China, Indonesia and Vietnam. However, predictions from all those areas are that higher prices will gradually appear over the coming months.

Clove Leaf Oil:                      Little stock available from origin. With farmers at origin looking for more cash from alternative crops; prices look to be increasing.

Coriander Seed Oil:             This market looks to continues remaining difficult for some time. However, small lots (2T clips) have become available in recent weeks, and reports of high priced buyers in the local market hampering export sales to traditional European buyers who continue to hold off for better prices when, and if they become available.

Coumarin:                             On the 24 Feb 2004 the EC received a request pursuant to Article 13(3) of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the EC to investigate the alleged circumvention of the anti-dumping measures imposed on imports of coumarin originating in the PRC. The request was submitted by the European Chemical Industry Council (CEFIC) on behalf of the sole producer in the Community. The request alleged that there had been a change in the pattern of trade following the imposition of the anti-dumping measures on imports of coumarin originating in the PRC, as shown by a significant increase in imports of the same product from India and Thailand. The Commission initiated an investigation by Regulation (EC) No 661/2004³ (the initiating Regulation) into the alleged circumvention of the anti-dumping measures imposed on imports of coumarin originating in the PRC by imports of coumarin consigned from India and Thailand. We are informed that in view of their findings of circumvention, within the meaning of Article 13(1) of the basis Regulation, the existing anti-dumping measures on imports of the product concerned originating in the PRC should be extended to the same product consigned from India and Thailand, whether declared as originating in India or Thailand or not. The duty extended should be the one established in Article 1(2) of the original Regulation. For anyone wishing to see a full copy of the report we suggest they apply to the EC Directorate-General for Trade “General Disclosure Document R-334”

Dill Oil:                                    Our main Bulgarian supplier reports that the 2004 crop is even worse than the 2003 crop. Some good quality Russian Dillweed (this is reportedly 80% of the Moldovan crop) will be available during the first half of September. However, the gap between sellers and buyers price ideas remain wide.          

Dimethyl Anthranilate:       ***NEW*** Production is now underway for Dimethyl Anthranilate ex petitgrain mandarin. Initial trials have proved successful and we shall be pleased to hear from interested parties.          

Eucalyptol:                             Prices easier from both China and Taiwan. However, Taiwan has the added problem of higher freight costs as well as the fact that all dangerous cargos have to be shipped by FCL.

Eucalyptus Globulus:          Prices have eased back in China as buyers continued to hold off. Additionally some Chinese exporters are looking for sales as production is stepped up. However, with the apparent lack of spot material in Europe buyers should be prepared to take some cover for their forward requirements as delays will occur on deliveries if stockists hold off too long whilst waiting for prices to stabilise.

Garlic Oil:                               With Chinese farmers having been discouraged by low prices it is obvious that stock is lower than generally recognised. Consequently during July/August we have seen prices increase by some 25%. Prices look certain to increase further in coming months.

Geranium Oil:                       The Chinese summer crop has entered the market and prices have eased back quite significantly. With the predicted increase in this years crop, Chinese speculators are likely to enter the market if prices fall too low. Consequently farmers could, as they have done in the past, hold back stock for the chance of higher prices. Egyptian geranium prices have also dropped to very attractive levels (around $36/kilo), but could ease a little further, depending on what happens in China.

Ginger Oil:                             With the current shortage of high priced ginger root at origin we see no real reason for any immediate price change on Chinese ginger oil. Sales have been very good.

Litsea Cubeba Oil:               With the 2003 crop almost sold out prices are very firm in China. This could change if there is a good new crop. However, with increased internal Chinese demand a lot of the new crop could be taken up by the local market, and prices may not decrease as much as buyers expect.

Menthol Crystals:                Higher menthol prices in India and China firmed in past couple of weeks to everyone’s surprise. Much higher than expected internal Indian demand has tightened the menthol market considerably. Power problems and the current port strikes in India add to the situation. Additionally with China predicting their crop to be 50% lower than last year this provides a strong backdrop for prices to stay higher for longer. Consequence: European stockists have now withdrawn causing shortages on the spot market.

Nutmeg Oil:                           The price of Indonesian nutmeg oil weakened during July/August and looks attractively priced at the moment. West Indian Oil prices are likely to follow, but at a much slower pace.

Orange Oil:                            Hurricane Charley, the worst storm to strike the US mainland has raised fears of orange oil supplies. With Brazilian orange oil prices having been decreasing over recent months the trend of low prices could be reversed with any demand from buyers who have run their inventories tight.

Patchouli Oil:                        Availability good, but consumer demand slow despite the easiness of Indonesian prices.

Peppermint Oil:                    Prices have increased over recent weeks for both Indian and Chinese material and demand strong.

Phenylethyl Alcohol:           Prices recently advanced to $3.80/kilo CIF plus from China for container lots, with spot parcels having strong demand. Main Indian manufacturer sold out for the rest of this year. Limited spot material available at time of writing.

Petitgrain Oil:                        Prices have increased, but still look to be attractively priced and worth looking at.

Pimento Leaf Oil:                 Oil remains short and offers hard to come by. Consequently prices remain firm.

Rosewood Oil:                     Situation at origin shows no sign of improvement. With the current shortage and continued demand prices can only continue upwards.

Sage Oil Officinalis:             Reports from origin indicate that there will be no improvement in this years supply situation. With the new crop underway small quantities are likely to be offered, but buyers should not expect prices easier than last year.

Sandalwood Oil:                   With no availability of oil from Indonesia sandalwood prices remain very firm. This is likely to increase demand on India, where the Government still controls exports, and this could apply pressure on market prices.

Spearmint Oil:                      With this years crop smaller than last year. Any strong demand over the coming weeks could result in higher prices. We have been told that many shippers are reluctant to sell in case farmers renege on current prices.

Tea Tree Oil:                         Market steady and price trend remains firm.

Vanillin/Ethyl Vanillin:          Recent prices increases in China, and strong demand from consumers have seen a lot of spot activity. Prices remain strong with increases from the petrochemical markets.

Vetivert Oil:                           Spot markets still show limited stocks and prices seem, for the time being, to remain stable. However, with a seemingly constant production we do see some signs of a weakening.

Please note the factories of our producer in Egypt are certified kosher by the London Beth Din.  We welcome your interests for their Calendula Concrete, Carnation Concrete, Geranium Concrete, Jasmine Concrete, Marigold Concrete and Violet Leaf Concrete and their Essential Oils, e.g. Coriander Herb, DMA Natural ex petitgrain mandarin, Geranium, Leek, Marjoram, Parsley Leaf, Tagete, and Onion etc

Spices:                                   Please contact our London office on +44 (0) 207 620 2252 for the latest news on Spices.