A PROFILE OF THE SOUTH AFRICAN ESSENTIAL OILS MARKET VALUE .

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A PROFILE OF THE SOUTH AFRICAN ESSENTIAL OILSMARKET VALUE CHAIN2010Directorate MarketingPrivate Bag X 15Arcadia0007Tel: 012 319 8455/6Fax: 012 319 8131Email: DM@daff.gov.zawww.daff.gov.za1

Table of Contents1.DESCRIPTION OF THE ESSENTIAL OILS’ INDUSTRY31.1 Production and Production Areas1.1.1 Overview of the essential oils market and its composition1.1.2 Identification of Products3662.7HARVESTING OF ESSENTIAL OILS2.1 Harvesting72.2 Essential Oils Marketing Activities73.EXPORTS VOLUMES84.IMPORTS VOLUMES195.USES OF ESSENTIAL OILS256.QUALITY & MAINTANANCE OF ESSENTIAL OILS277.ESSENTIAL OIL VALUE CHAIN ANALYSIS278.ESSENTIAL OILS DISTRIBUTION CHANNELS338.1 Value Adding in South Africa349. MARKET ACCESS3510. MARKET INTELLIGENCE4211. THE ESSENTIAL OILS OF PEPPERMINT11.1.1 Properties of peppermint11.1.2 Safety precautions and warnings11.1.3 Production levels in South Africa11.1.4 Major production Areas in South Africa11.1.5 Stem, Leaves, and Flowers11.1.6 Essential part of peppermint11.1.7 Post harvest handling11.1.8 The peppermint sale price11.1.9 Essential Oils of Peppermint Industrial Utilization11.1.10 Cosmetic Utilization10010010010010110110110110210210312. ACKNOWLEDGEMENTS1112

1.DESCRIPTION OF THE ESSENTIAL OILS’ INDUSTRYAn essential oil is a liquid that is generally distilled (most frequently by steamor water) from the leaves, stems, flowers, bark, roots, seeds, fruits or otherorgans of a plant. Using the different technologies available essential oils aresourced from over 3,000 plants of which approximately 300 are of commercialimportance. Most flowers contain very little volatile oil and their chemicalcomponents are too delicate and easily denatured by the high heat used insteam distillation.A solvent such as hexane or supercritical carbon dioxide is used to extractthe oils. Extracts from hexane and other hydrophobic solvents are calledconcretes, which is a mixture of essential oil, waxes, resins, and otherlipophilic (oil soluble) plant material. The majority of essential oils are usuallyobtained from agricultural plants but a number of oils are collected from wildsources including trees.The strengths of essential oils They are antibacterial, antiviral, antifungal, and antimicrobial.Essential oils by-pass the digestive system so they are beneficial forpeople with poor digestion/assimilation.They require no refrigeration and require very little storage space.They have the longest shelf life of any plant known to man.Essential oils are highly oxygenating.They are very cost-effective because they are one of the few substancesthat the more you use them, the less you need them.They are suitable for babies since they cannot swallow tablets andcapsules thus essential oils provide a solution as they only come inliquid form.Weakness of the Essential Oils industry (Production Constraints) Production of essential oils requires highly focused farm practices andfield maintenance for high quality yield.Requires more technical support, including the production inputs andmost effective plant material for new plantingsThere is a high entry barrier which includes fencing, cuttings,distillation plants and land preparation.1.1 Production and Production Areas3

The major producers of essential oils across the world are Brazil, China, USA,Egypt, India, Mexico, Guatemala, Morocco and Indonesia. All of them with theexception of USA are developing countries with low cost, peasant typeeconomies. It is estimated that about 65% of world production emanates fromdeveloping countries. The major consumers are the USA (40%), WesternEurope (30%) and Japan (7%). While the EU as a whole dominate world trade,exports and imports, no individual country from this bloc features in the listof major producers. Most of the major producing countries have largepopulations with huge internal appetite for essential oils. The table belowshows the projected hectares under essential oil crops given by provinces inSouth Africa by 2010.Table 1: The projected ha under essential oil crops by 2010 as given byProvinces.ProvinceSpeciesMpumalanga Vetiver, Citronella, Lippia, Eucalyptus,Rosemary, Geranium, Lemon grassFree StateTagete, Artemisia, LavendinNorthernCapeNorth WestEasternCapeWesternCapeLimpopo &MachadoGautengKZNTOTAL haArtemisia, 94370Marjoram, Rosemary, Lavendin45Geranium, Rosemary, Lavendin, ChamomileGeranium, Rosemary, Lavender40200Eriocephalus, Lavender, Lavandin, Buchu, Rosemary77Lippia, Geranium, Rosemary, Lavendin, Tea tree91Lavendin, Rosemary, Artemisia82Lavendin, Rosemary Eucalyptus, Geranium, Tea tree, 422Lemon tea tree, Spear Mint, Lemon grass, Artemisia,Melissa, ThymeTOTAL1970These estimates exclude wild harvesting and community projects in progressSource: South African Essential Oil Producer Association (SAEOPA)Table 1 show the estimated hectares of essential oil crops of different specieswhich will be planted by different provinces by 2010. The table shows that inthe Mpumalanga province it is projected that 943 ha will be planted toessential oil crops by 2010, followed by Kwazulu Natal with 422 ha andEastern Cape with 200 ha.4

The estimated total hectares to be devoted to essential oil crops by all theprovinces by 2010 are about 1970 ha. However of all the total speciesestimated, Geranium, Lavendin and Rosemary are the most projected speciesto be planted in all provinces by 2010. The table indicates that in allProvinces, Kwazulu Natal Province is projected to be the major producer ofmost kinds of essential oil species than the other provinces by 2010.Table 2: Estimated Production Statistics for certain selected EssentialOils 2009.OIL TYPESESTIMATED VALUE OFPRIMARYPRODUCTION (2009)R7 444 526.00Jasmine, R2 237 169.75Major Oil (Citrus) and Eucalyptus)Minor Oils (e.g. Chamomiles,Lavenders, Tea Trees, Mints)Minor Oils-FRIDGE Study - SpecifiedGeranium (Pelargonium Graveolens Roseum)Buchu (Betulina, Crenulata)Chamomile – Roman (Anthemis nobilis)Rosemary (Rosmarinus Officinalis)Lemon Grass (Cymbopogon Citratus)Lemon balm (Melissa officinalis)Lippia (Lippia javanica)Rose Damascene (Rosa * Damascene)Source: Institute of Natural ResourcesR541 666.67500 000.00R24 305.56R15 000.00R7 777.78-Table 2 indicates different types of essential oils and the estimated values ofprimary production in 2009.Table 3: The most utilized essential oils and major producersProductCountryOrangeAustralia, Brazil, Dominican Republic, Israel, Italyand USABrazil, China, India, Japan, North Korea, Paraguay,Taiwan and ThailandCorn mintEucalyptus (cineole-type)Australia, Austria, Brazil, China, India, Paraguay,Portugal, South Africa and SpainCitronellaPeppermintLemonChina, India and VietnamAustralia, China, Italy, Japan and USAArgentina, Australia, Brazil, Greece, Spain, Italy,5

ProductCountryClove leafCedar woodLitsea cubebaSassafrasLimeSpearmintUSA and PeruBrazil, Indonesia, Madagascar, Sri Lanka andTanzaniaUSA and ChinaChinaBrazil and USABrazil, China, Cuba, Ghana, Haiti, Ivory Coast,Jamaica, Mexico and PeruArgentina, Australia, Brazil, Bulgaria, China,Egypt, France, Hungary, Japan, Korea, Morocco,New Zealand, Paraguay, Romania, Russia, Taiwan,UK, USA and YugoslaviaSource: South African Essential Oil Producer Association (SAEOPA)1.1.1Overview of the essential oils market and its compositionProduction data for essential oils are hard to find, as it is very difficult to doan exhaustive compilation covering the broad spectrum of all of essential oilsproduced. The essential oil industry is dynamic with tastes and preferences ofconsumers changing by the day. The top 10 crops in terms of productionaccount for about 80 percent of the total world market for essential oils. Oneof the most important things to do for farmers who want to be involved inessential oils production is selecting the right seed or plant material forsowing. It is recommended that this be obtained from a reputable supplier.Farmers should also be knowledgeable on weed control and management asthis will affect the quality of the end product. If weeds are harvested anddistilled with the crop, the oil from weeds can contaminate the desired oil,which would compromise quality. These would lead to a total rejection of thecrop’s oil which will have a negative impact on the farm income.1.1.2Identification of ProductsGiven the appropriate equipment, essential oils can be fractionated andcomponents sold individually. Alternatively, at home industry level, essentialoils can be used in scented candles, soaps, and hand creams. Some authorsare of the view that massaging oils into the human skin as in aromatherapy isof little therapeutic value, although it may induce a sense of sensual wellbeing. However, in spite of the lack of a scientific basis for aromatherapy, itremains a viable component of the market for the South African essential oilsindustry.6

There are numerous ways to create value added products through the use ofessential oils. Based on information gathered from a brief overview of theessential oil sub sector map and value chain, it has been decided that thefollowing value added products will be investigated further, completing eachinvestigation with a sub sector map for that product. The products are;Soaps, Scented candles, Bath salts, Aromatherapy creams and lotions andPotpourri.It has been determined that each of these identified products are relativelysimple to make, thus making use of the home based production units, andhave a viable market within South Africa, and particularly, the Eastern Cape.Each of these products will be discussed in detail.2.HARVESTING OF ESSENTIAL OILS2.1HarvestingIt must be noted that the essential oils can be harvested as either plants orseeds. For the plants the proximity of the steam distillation plant isimportant. If the period between harvesting and distillation is too long the oilfrom the plant can evaporate or decline in quality. The quality of the oil isvolatile. It changes as the crop grows; this means that a farmer should ensurethat the crop is harvested at the right time.2.2 Essential Oils Marketing ActivitiesThe marketing structure of essential oils is not different from most products.The traditional structure begins with the producer who sells to the flavor andfragrance industries. Fragrance houses may or may not embark on valueadding to the product, they then sell it to the end users. At times system hasbeen supplemented by traders, agents and brokers who use their knowledgeto market niches and buy directly from producers and sell directly to theflavor houses or end users. Although it is very difficult to enter into theessential oils industry from either side, as producers or end users, there isalways an opportunity for small players. The reason for the difficulty ingaining entry is that once end users have developed a product using specificoil they do not want to change that oil or the supplier as they may fear acompromise in quality. Small scale farmers may enter the market and targetsmall industries such as Aromatherapy and Massage for their productmarket.7

3. EXPORTS VOLUMESExport Quantity (tons)Figure 1: Exports volumes of essential oils of peppermints(including concretes and absolutes) to various d (Years)Source: QuantecFigure 1 indicates exports volumes of essential oils of peppermint (includingconcretes and absolutes) from South Africa to various regions between 2001and 2010 period. During the same period under review, the major exportmarkets for essential oils of peppermint (including concretes and absolutes)were Africa followed by the Americas and Oceania. Europe and Asia had verylow levels of exports of essential oils of peppermint including concretes andabsolutes during the same period under review. Between 2001 and 2010,essential oils of peppermint including concretes and absolutes exports fromSouth Africa to Africa had fewer fluctuations. Exports of essential oils fromSouth Africa to Africa attained a peak in 2009 at approximately 2.331 tonswhile exports of essential oils of peppermint from South Africa to Americasattained a peak in 2004 at approximately 2.269 tons. Exports of essential oilsof peppermint including concretes and absolutes from South Africa toOceania attained a peak in 2003 at approximately 1.32 tons.8

Figure 2: Exports volumes of essential oils of peppermint(including concretes and absolutes) to AfricaExport Quantity (tons)2.521.510.50Eastern Africa 252.2831.052Period (Years)Source: QuantecFigure 2 represents exports of essential oils of peppermint (includingconcretes and absolutes) from South Africa to Africa between 2001 and 2010period. The graph further shows that the attractive market during the periodunder examination was SADC region with no competition from other Africanregions. During the same period under review, exports of essential oils ofpeppermint to SADC had fewer fluctuations. A peak in exports of essentialoils of peppermint from South Africa to the SADC region was attained in 2009at approximately 2.283 tons. Eastern Africa Rest had very low levels ofexports of essential oils of peppermint from South Africa during the periodunder review.Figure 2 clearly indicates that the demand for essential oils of peppermintfrom South Africa to Africa was less as compared to what South Africaexported to Americas, Europe and Asia over the same period underexamination.9

Figure 3: Exports volumes of essential oils of peppermints (includingconcretes and absolutes) to SADC2Export Quantity 000Seychelles00000.025000.00100United Republic of 561.8950.726MauritiusPeriod (Years)Source: QuantecFigure 3 illustrates exports volumes of essential oils of peppermints (includingconcretes) and absolutes from South Africa to SADC member states between2001 and 2010 period. The major attractive market for essential oils ofpeppermint including concretes and absolutes from South Africa wasZimbabwe followed by Malawi then Zambia and United Republic of Tanzania.The graph further illustrates that essential oil of peppermint exports fromSouth Africa to SADC region had fewer fluctuations during the period underreview. Exports of essential oils of peppermint from South Africa to Zimbabweattained a peak in 2009 at approximately 1.895 tons while Malawi alsoattained its peak in 2009 at approximately 0.388 tons. Tanzania and Zambiaexperienced their peaks in 2004 and 2010 at approximately 0.213 tons and0.204 tons respectively.10

Export Quantity (tons)Figure 4: Exports volumes of essential oils of peppermints(including concretes and absolutes) to 062007200820092010Eastern Asia0000000000.01South-central Asia0000000.009000South-eastern Asia00.100000.027 0.07500Western Asia00000.00100000.004Period (Years)Source: QuantecFigure 4 shows essential oils of peppermints exports (including concretes andabsolutes) from South Africa to Asia between 2001 and 2010 period. Duringthe period under scrutiny, the most attractive market for essential oils ofpeppermint exports from South Africa to Asia was South-eastern Asiafollowed by a few exports to Eastern Asia and South-central Asia. The graphfurther shows that there were very few fluctuations of exports of essential oilsof peppermint South-eastern Asia over the same period under examination.Essential oils of peppermint exports from South Africa to South-eastern Asiaattained a peak in 2002 at approximately 0.1 tons while Eastern Asia andSouth-eastern Asia had very low volumes of essential oil exports from SouthAfrica over the same period under examination.11

Figure 5: Exports volumes of essential oils of peppermints(including concretes and absolutes) to Europe0.4Export Quantity (tons)0.350.30.250.20.150.10.050European 100.001000.3450.120.2290.09Period (Years)Source: QuantecFigure 5 depicts volumes of essential oils of peppermints exports (includingconcretes and absolutes) from South Africa to Europe between 2001 and2010 period. The graph further depicts that essential oils of peppermint werevery low in 2002 and 2004, with no exports of essential oils in 2001, 2003and 2006. The graph also depicts that volumes of essential oils of peppermintexports started to increase in 2007 then a slight decline was experienced in2008 and 2010. A peak in exports of essential oils of peppermint from SouthAfrica to the European Union was attained in 2007 at approximately 0.345tons during the same period under examination.12

Figure 6: Exports volumes of essential oils of peppermints (includingconcretes and absolutes) to the AmericasExport Quantity 72008200920100002.26900.080.060.0590.0010Period (Years)Source: QuantecFigure 6 indicates volumes of essential oils of peppermints exports (includingconcretes and absolutes) from South Africa to Americas between 2001 and2010 period. The figure further indicates that the major export market foressential oils of peppermint from South Africa to Americas was NAFTA. Thegraph also indicates that there were no exports of essential oils of peppermintfrom South Africa to NAFTA in 2001, 2002, 2003, 2005 and 2010. Exports ofessential oils of peppermint from South Africa to NAFTA attained a peak in2004 at approximately 2.269 tons.13

Figure 7: Exports volumes of essential oils of peppermints (includingconcretes and absolutes) to Oceania1.4Export Quantity (tons)1.210.80.60.40.20Australia and New .32000.350000.006Period (Years)Source: QuantecFigure 7 illustrates exports volumes of essential oils of peppermints (includingconcretes and absolutes) from South Africa to Oceania between 2001 and2010 period. The figure also illustrates that during the period under scrutiny,the most attractive market in Oceania was Australia and New Zealand. Thegraph further illustrates that exports of essential oils of peppermint fromSouth Africa to Australia and New Zealand occurred in 2003, 2006 and 2010with exports of essential oils attaining a peak in 2003 at approximately 1.32tons. The figure further illustrates that from 2007 to 2009 there were zeroexports of essential oils of peppermint to Australia and New Zealand duringthe same period under scrutiny.14

Figure 8: Value of essential oils of peppermints exports (includingconcretes and absolutes) by ProvincesExports Value 20022003200420052006200720082009Western 000000North 8045463932614280Period (Years)Source: QuantecFigure 8 shows values of essential oils of peppermints exports (includingconcretes and absolutes) by provinces of South Africa to the world between2002 and 2009 period. The figure also shows that the major supplying exportmarkets for essential oils of peppermints from South Africa during the periodunder review was Gauteng followed by Western Cape, KwaZulu-Natal andNorth West provinces. Exports of essential oils by Gauteng attained a peak in2009 at approximately 614 280 kilograms while Western Cape attained itspeak in 2004 at approximately 395 203 kilograms. Kwazulu-Natal and NorthWest provinces had very low export volumes of essential oils of peppermintfrom South Africa to the world.15

Exports Value (Rands)Figure 9: Value of essential oils of peppermints exports (includingconcretes and abso

1.1 Production and Production Areas 3 1.1.1 Overview of the essential oils market and its composition 6 1.1.2 Identification of Products 6 2. HARVESTING OF ESSENTIAL OILS 7 2.1 Harvesting 7 2.2 Essential Oils Marketing Activities 7 3. EXPORTS VOLUMES 8 4. IMPORTS VOLUMES 19 5. USES OF ESSENTIAL OILS 25 6. QUALITY & MAINTANANCE OF ESSENTIAL OILS .

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