~ NEWSLETTER (WINTER EDITION 2003) ~

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.

Firstly we would like to thank all our customers and suppliers for their valued support over 2003, and take this opportunity of wishing everyone the season’s greetings, and a prosperous and happy 2004.

At time of writing reports of America’s decision to impose trade sanctions on Chinese textiles imported into the US market is an ominous sign that protectionism is appearing from that side of the world.

Also in October the US FDA issued a final interim regulation (21 CFR part 1) requiring domestic and facilities that manufacture, process, label or hold foods for human consumption in the US to register with the FDA under the Public Health Security and Bioterrorism Preparedness and Response Act. Details of which can be found on the following websites:

 http://www.cfsan.fda.gov and http://www.cfsan.fda.gov/~dms/fsbtac13.htnl.

The FDA also requires food importers to file prior to notice of arrival of importation of every material they import into the USA. If not filed correctly, and a number obtained, the US authorities would block the respective importation at the suppliers cost.

Meanwhile the EU had threatened a trade war if the American steel tariff was not withdrawn. The tariff concessions of the community were to be suspended as from 1^st March 2004 in respect of products originating in the USA. These included essential oils and resinoids, perfumery, cosmetic and toilet preparations. See article 2 of the regulation. This regulation was to enter into force on the day of its publication in the Official Journal of the European Union. Luckily however, at the beginning of December the US Government agreed to withdraw the said tariff and the threat of the impending trade was removed.

On currency the US Dollar falls this year, including a 12% drop against the euro and a 9% slip against the yen is just as likely to affect trade more than trade tariffs. At time of writing Sterling has hit a 5-year high against the dollar. The dollar has slipped to an all-time low against the euro, raising fears that the strength of the currency could stifle the eurozone’s export-led recovery. While America is quietly allowing its currency to sink against major currencies it’s making its exports more competitive and imports more expensive. This could prove a bigger long-term worry than any protectionism. Additionally there is the problem of the US$ and the Chinese Renmembi. With the fall in the dollar, and the renmembi tied to the dollar, prices of China’s exports are falling, in dollar terms. This could be read as “exporting deflation”. However, for China to peg their currency to the dollar has given China many advantages, namely it provides stability to exporters and helps the economy perform in both China and Hong Kong.

~ BRINGING MARKETS INTO FOCUS ~

Amyris Oil:                            Demand remained good during November, and prices remain firm. However reports indicate some lots are suffering quality-wise because of the shift of origin of wood for distillation.

Aniseed Oil/Anethol:           Production and sales meeting current requirements. Small price fluctuation noted but nothing to cause problems. Some large quantities of anethol were purchased during November to avoid a possible 2% increase in January when expected removal of vat rebates should take effect.

Bay Oil:                                   Market conditions look to remain stable for the remainder of the year.

Cardamom Oil:                     Global cardamom prices have remained steady despite the arrival of the Guatemalan seed new crop. This year saw a month-long delay to the seed crop raising fears the harvest will be low, resulting with many exporters hoarding stocks in anticipation of shortages. However, anticipated sales of cardamom oil seem not to have materialised, and current prices look attractive.

Cassia Oil:                             Market steady with no real price changes.

Cinnamon Leaf Oil:              Market continues to be weak with no evidence of any significant buying from the main market (USA).

Citronella Oil 85/35:             Slow demand continues. See no changes unless there is a significant rise on the part of buyers from the market. Prices are very weak at the moment.

Clove Leaf Oil:                      Madagascar and Indonesian markets remain weak. Stockists in Europe look to be holding stock of material bought at earlier higher prices. We can only describe prospects as still very much subdued.

Coriander Seed Oil:             Supplies looking to remain tight. Demand for oil at the factory strong even before any distillation has taken place. Whilst buyers are waiting for lower prices, they may be in for a long wait!

Coumarin:                             Euro based material remains firm, giving continued advantage to dollar-based origins, e.g. India.

D’Limonene:                         Continued increase in offers made by Brazil should see a further easing of prices over the coming weeks.  

Eucalyptol:                             With the closeness of this product to eucalyptus, prices have eased. But one should bear in mind that with the vat rebate being reduced in January there will be an automatic 2% price increase for Chinese production. That is of course dependent on buyers coming into the market, and will not affect the Taiwan production.

Eucalyptus Globulus:          The second crop is in full swing. According to our sources in China there will be some 300-400MT distilled during this period.  With this news the market had declined with price levels of $5.20 down to 4.85 CIF. However with consumers slow coming forward whilst waiting for a more stable market, prices could ease a little further unless speculators come into the market. We find demand has started to increase. Re-sellers have been off-loading higher priced material knowing they can replace to advantage. Could this recent spot demand be the start of a soon to be upward turn?

Geranium Oil:                       Chinese geranium oil crop is virtually at an end with output getting shorter. Also quality is usually poorer in quality at this time. Market prices are low at the moment and if the farmers stop selling the market could well turn firmer. Egyptian oil higher priced than the Chinese, and is not helped by Egyptian Export controls on prices.

Ginger Oil:                             Price of ginger oil from China has risen quite sharply over the past couple of weeks with reports of flood damage reducing the ginger crops. Excessive rains in the Anhui Province have reportedly destroyed some of the crops, leading some speculators to stock-pile. Whilst market looks to be firming further one has to remember that it could be short-lived if demand is from the traders, and not the consumers.

Ho Wood Oil:                          Have seen more offers recently from our Chinese exporters.

Menthol Crystals:                Prices seem to be going nowhere. Dealers continue to shun the market, due to the saturation of Indian and Chinese exporters having flood the markets direct.

Nutmeg Oil:                           An upturn is unlikely; market looks to continuous stagnation for a while longer.

Patchouli Oil:                         Demand has slackened off, and prices have eased back significantly by both Chinese and Indonesian shippers. Some good bargains have been found in the market place.

Peppermint Oil:                    Buyers anticipation of a good Indian crop held off any substantial buying. Noticeable increase in odour concerns over the past couple of months. Not sure why, but this could probably be righted by further distillation.

Petitgrain Oil:                        Prices should increase as the South American winter period kicks in, slowing distillation by the farmers.

Pimento Leaf Oil:                 Pimento production in Mexico, Jamaica, Guatemala and Honduras was seemingly unaffected by the stormy seasons during July. However, Jamaican pimento berries at origin are virtually exhausted with very little material available for shipment. Distillation of oil in Jamaica is now beginning to take place. This should bring any increase of demand forward as stocks in Europe and the USA look to be short.

Orange Oil:                            Lower prices appearing more frequently in the market place for Brazilian oil. Despite the lack of any current volume business users should think about covering any immediate needs.

Sandalwood Oil:                   Situation in India is likely to remain unchanged for the next few months. Supplies in Europe extremely short.

Spearmint Oil:                      The continuous rains during the harvest season have reportedly damaged the second cutting. Farmers and speculators accordingly took stock in anticipation of higher price levels. Good business has passed during November for 60% material on the European markets.

Tea Tree Oil:                         Market steady but any real demand is lacking.

Vanillin:                                  Markets for both vanillin, and ethyl vanillin, remain strong with a lot of business having been transacted. Demand looks to continue, and prices have recently been increased in China.

Please note the factories of our producer of Egyptian Oils have now been certified kosher by the London Beth Din.  We welcome your interests for Calendula Concrete, Carnation Concrete, Geranium Concrete, Jasmine Concrete, Marigold Concrete and Violet Leaf Concrete and other Egyptian Essential Oils.

 Aromatic Chemicals:         Many chemical suppliers have lowered their prices in an attempt to increase demand. Additionally the VAT rebate in China is to be reduced in 2004. Consequently in January some aromatic chemical prices could be higher than that in December by 2% without account of any market fluctuation.

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