a profile of the south african essential oils market … · 1. description of the essential oils’...

A PROFILE OF THE SOUTH AFRICAN ESSENTIAL OILS MARKET VALUE CHAIN

2010

Directorate Marketing Private Bag X 15

Arcadia 0007

Tel: 012 319 8455/6 Fax: 012 319 8131

Email: [email protected] www.daff.gov.za

1

Table of Contents

1. DESCRIPTION OF THE ESSENTIAL OILS’ INDUSTRY 3

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 27

7. ESSENTIAL OIL VALUE CHAIN ANALYSIS 27

8. ESSENTIAL OILS DISTRIBUTION CHANNELS 33

8.1 Value Adding in South Africa 34

9. MARKET ACCESS 35

10. MARKET INTELLIGENCE 42

11. THE ESSENTIAL OILS OF PEPPERMINT 100 11.1.1 Properties of peppermint 100 11.1.2 Safety precautions and warnings 100 11.1.3 Production levels in South Africa 100 11.1.4 Major production Areas in South Africa 101 11.1.5 Stem, Leaves, and Flowers 101 11.1.6 Essential part of peppermint 101 11.1.7 Post harvest handling 101 11.1.8 The peppermint sale price 102 11.1.9 Essential Oils of Peppermint Industrial Utilization 102 11.1.10 Cosmetic Utilization 103

12. ACKNOWLEDGEMENTS 111

2

1. DESCRIPTION OF THE ESSENTIAL OILS’ INDUSTRY An essential oil is a liquid that is generally distilled (most frequently by steam or water) from the leaves, stems, flowers, bark, roots, seeds, fruits or other organs of a plant. Using the different technologies available essential oils are sourced from over 3,000 plants of which approximately 300 are of commercial importance. Most flowers contain very little volatile oil and their chemical components are too delicate and easily denatured by the high heat used in steam distillation. A solvent such as hexane or supercritical carbon dioxide is used to extract the oils. Extracts from hexane and other hydrophobic solvents are called concretes, which is a mixture of essential oil, waxes, resins, and other lipophilic (oil soluble) plant material. The majority of essential oils are usually obtained from agricultural plants but a number of oils are collected from wild sources 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 for

people 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 substances

that the more you use them, the less you need them. • They are suitable for babies since they cannot swallow tablets and

capsules thus essential oils provide a solution as they only come in liquid form.

Weakness of the Essential Oils industry (Production Constraints) • Production of essential oils requires highly focused farm practices and

field maintenance for high quality yield. • Requires more technical support, including the production inputs and

most effective plant material for new plantings • There is a high entry barrier which includes fencing, cuttings,

distillation plants and land preparation.

1.1 Production and Production Areas

3

The major producers of essential oils across the world are Brazil, China, USA, Egypt, India, Mexico, Guatemala, Morocco and Indonesia. All of them with the exception of USA are developing countries with low cost, peasant type economies. It is estimated that about 65% of world production emanates from developing countries. The major consumers are the USA (40%), Western Europe (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 list of major producers. Most of the major producing countries have large populations with huge internal appetite for essential oils. The table below shows the projected hectares under essential oil crops given by provinces in South Africa by 2010. Table 1: The projected ha under essential oil crops by 2010 as given by Provinces. Province Species TOTAL ha Mpumalanga Vetiver, Citronella, Lippia, Eucalyptus, Artemisia,

Rosemary, Geranium, Lemon grass 943

Free State Tagete, Artemisia, Lavendin 70 Northern Cape

Marjoram, Rosemary, Lavendin 45

North West Geranium, Rosemary, Lavendin, Chamomile 40 Eastern Cape

Geranium, Rosemary, Lavender 200

Western Cape

Eriocephalus, Lavender, Lavandin, Buchu, Rosemary 77

Limpopo & Machado

Lippia, Geranium, Rosemary, Lavendin, Tea tree 91

Gauteng Lavendin, Rosemary, Artemisia 82 KZN Lavendin, Rosemary Eucalyptus, Geranium, Tea tree,

Lemon tea tree, Spear Mint, Lemon grass, Artemisia, Melissa, Thyme

422

TOTAL 1970 These estimates exclude wild harvesting and community projects in progress Source: South African Essential Oil Producer Association (SAEOPA) Table 1 show the estimated hectares of essential oil crops of different species which will be planted by different provinces by 2010. The table shows that in the Mpumalanga province it is projected that 943 ha will be planted to essential oil crops by 2010, followed by Kwazulu Natal with 422 ha and Eastern Cape with 200 ha.

4

The estimated total hectares to be devoted to essential oil crops by all the provinces by 2010 are about 1970 ha. However of all the total species estimated, Geranium, Lavendin and Rosemary are the most projected species to be planted in all provinces by 2010. The table indicates that in all Provinces, Kwazulu Natal Province is projected to be the major producer of most kinds of essential oil species than the other provinces by 2010. Table 2: Estimated Production Statistics for certain selected Essential Oils 2009. OIL TYPES ESTIMATED VALUE OF

PRIMARY PRODUCTION (2009)

Major Oil (Citrus) and Eucalyptus) R7 444 526.00 Minor Oils (e.g. Chamomiles, Jasmine, Lavenders, Tea Trees, Mints)

R2 237 169.75

Minor Oils-FRIDGE Study - Specified Geranium (Pelargonium Graveolens Roseum) R541 666.67 Buchu (Betulina, Crenulata) 500 000.00 Chamomile – Roman (Anthemis nobilis) R24 305.56 Rosemary (Rosmarinus Officinalis) R15 000.00 Lemon Grass (Cymbopogon Citratus) R7 777.78 Lemon balm (Melissa officinalis) - Lippia (Lippia javanica) - Rose Damascene (Rosa * Damascene) - Source: Institute of Natural Resources Table 2 indicates different types of essential oils and the estimated values of primary production in 2009. Table 3: The most utilized essential oils and major producers Product Country

Orange Australia, Brazil, Dominican Republic, Israel, Italy

and USA Corn mint Brazil, China, India, Japan, North Korea, Paraguay,

Taiwan and Thailand

Eucalyptus (cineole-type) Australia, Austria, Brazil, China, India, Paraguay, Portugal, South Africa and Spain

Citronella China, India and Vietnam Peppermint Australia, China, Italy, Japan and USA Lemon Argentina, Australia, Brazil, Greece, Spain, Italy,

5

Product Country USA and Peru

Clove leaf Brazil, Indonesia, Madagascar, Sri Lanka and Tanzania

Cedar wood USA and China Litsea cubeba China Sassafras Brazil and USA Lime Brazil, China, Cuba, Ghana, Haiti, Ivory Coast,

Jamaica, Mexico and Peru Spearmint Argentina, Australia, Brazil, Bulgaria, China,

Egypt, France, Hungary, Japan, Korea, Morocco, New Zealand, Paraguay, Romania, Russia, Taiwan, UK, USA and Yugoslavia

Source: South African Essential Oil Producer Association (SAEOPA)

1.1.1 Overview of the essential oils market and its composition Production data for essential oils are hard to find, as it is very difficult to do an exhaustive compilation covering the broad spectrum of all of essential oils produced. The essential oil industry is dynamic with tastes and preferences of consumers changing by the day. The top 10 crops in terms of production account for about 80 percent of the total world market for essential oils. One of the most important things to do for farmers who want to be involved in essential oils production is selecting the right seed or plant material for sowing. It is recommended that this be obtained from a reputable supplier. Farmers should also be knowledgeable on weed control and management as this will affect the quality of the end product. If weeds are harvested and distilled with the crop, the oil from weeds can contaminate the desired oil, which would compromise quality. These would lead to a total rejection of the crop’s oil which will have a negative impact on the farm income.

1.1.2 Identification of Products Given the appropriate equipment, essential oils can be fractionated and components sold individually. Alternatively, at home industry level, essential oils can be used in scented candles, soaps, and hand creams. Some authors are of the view that massaging oils into the human skin as in aromatherapy is of little therapeutic value, although it may induce a sense of sensual well being. However, in spite of the lack of a scientific basis for aromatherapy, it remains a viable component of the market for the South African essential oils industry.

6

There are numerous ways to create value added products through the use of essential oils. Based on information gathered from a brief overview of the essential oil sub sector map and value chain, it has been decided that the following value added products will be investigated further, completing each investigation with a sub sector map for that product. The products are; Soaps, Scented candles, Bath salts, Aromatherapy creams and lotions and Potpourri. It has been determined that each of these identified products are relatively simple to make, thus making use of the home based production units, and have a viable market within South Africa, and particularly, the Eastern Cape. Each of these products will be discussed in detail.

2. HARVESTING OF ESSENTIAL OILS

2.1 Harvesting It must be noted that the essential oils can be harvested as either plants or seeds. For the plants the proximity of the steam distillation plant is important. If the period between harvesting and distillation is too long the oil from the plant can evaporate or decline in quality. The quality of the oil is volatile. It changes as the crop grows; this means that a farmer should ensure that the crop is harvested at the right time.

2.2 Essential Oils Marketing Activities The marketing structure of essential oils is not different from most products. The traditional structure begins with the producer who sells to the flavor and fragrance industries. Fragrance houses may or may not embark on value adding to the product, they then sell it to the end users. At times system has been supplemented by traders, agents and brokers who use their knowledge to market niches and buy directly from producers and sell directly to the flavor houses or end users. Although it is very difficult to enter into the essential oils industry from either side, as producers or end users, there is always an opportunity for small players. The reason for the difficulty in gaining entry is that once end users have developed a product using specific oil they do not want to change that oil or the supplier as they may fear a compromise in quality. Small scale farmers may enter the market and target small industries such as Aromatherapy and Massage for their product market.

7

3. EXPORTS VOLUMES

Figure 1: Exports volumes of essential oils of peppermints (including concretes and absolutes) to various regions

0

0.5

1

1.5

2

2.5

Period (Years)

Expo

rt Q

uant

ity (t

ons)

Africa 0.15 0.097 0.71 0.682 1.418 1.002 1.552 1.251 2.331 1.052

Americas 0 0 0 2.269 0 0.08 0.06 0.059 0.001 0

Asia 0 0.1 0 0 0.001 0 0.036 0.079 0 0.01

Europe 0 0.001 0 0.001 0 0 0.345 0.12 0.229 0.09

Oceania 0 0 1.32 0 0 0.35 0 0 0 0.006

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 1 indicates exports volumes of essential oils of peppermint (including concretes and absolutes) from South Africa to various regions between 2001 and 2010 period. During the same period under review, the major export markets for essential oils of peppermint (including concretes and absolutes) were Africa followed by the Americas and Oceania. Europe and Asia had very low levels of exports of essential oils of peppermint including concretes and absolutes during the same period under review. Between 2001 and 2010, essential oils of peppermint including concretes and absolutes exports from South Africa to Africa had fewer fluctuations. Exports of essential oils from South Africa to Africa attained a peak in 2009 at approximately 2.331 tons while exports of essential oils of peppermint from South Africa to Americas attained a peak in 2004 at approximately 2.269 tons. Exports of essential oils of peppermint including concretes and absolutes from South Africa to Oceania 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 Africa

0

0.5

1

1.5

2

2.5

Period (Years)

Exp

ort Q

uant

ity (t

ons)

Eastern Africa Rest 0 0 0 0 0 0 0 0.001 0.048 0

SADC 0.15 0.97 0.71 0.682 1.418 1.002 1.552 1.25 2.283 1.052

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 2 represents exports of essential oils of peppermint (including concretes and absolutes) from South Africa to Africa between 2001 and 2010 period. The graph further shows that the attractive market during the period under examination was SADC region with no competition from other African regions. During the same period under review, exports of essential oils of peppermint to SADC had fewer fluctuations. A peak in exports of essential oils of peppermint from South Africa to the SADC region was attained in 2009 at approximately 2.283 tons. Eastern Africa Rest had very low levels of exports of essential oils of peppermint from South Africa during the period under review. Figure 2 clearly indicates that the demand for essential oils of peppermint from South Africa to Africa was less as compared to what South Africa exported to Americas, Europe and Asia over the same period under examination.

9

Figure 3: Exports volumes of essential oils of peppermints (including concretes and absolutes) to SADC

0

0.20.4

0.6

0.8

11.2

1.4

1.61.8

2

Period (Years)

Exp

ort Q

uant

ity (t

ons)

Mauritius 0.15 0.022 0 0 0 0 0 0 0 0

Malawi 0 0.075 0 0 0 0.204 0.001 0.052 0.388 0.122

Mozambique 0 0 0 0 0 0.005 0 0 0 0

Seychelles 0 0 0 0 0.025 0 0 0.001 0 0

United Republic of Tanzania 0 0 0 0.213 0.003 0 0.01 0 0 0

Zambia 0 0 0.01 0.08 0.09 0 0.003 0.041 0 0.204

Zimbabwe 0 0 0.7 0.389 1.3 0.793 1.538 1.156 1.895 0.726

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 3 illustrates exports volumes of essential oils of peppermints (including concretes) and absolutes from South Africa to SADC member states between 2001 and 2010 period. The major attractive market for essential oils of peppermint including concretes and absolutes from South Africa was Zimbabwe followed by Malawi then Zambia and United Republic of Tanzania. The graph further illustrates that essential oil of peppermint exports from South Africa to SADC region had fewer fluctuations during the period under review. Exports of essential oils of peppermint from South Africa to Zimbabwe attained a peak in 2009 at approximately 1.895 tons while Malawi also attained its peak in 2009 at approximately 0.388 tons. Tanzania and Zambia experienced their peaks in 2004 and 2010 at approximately 0.213 tons and 0.204 tons respectively.

10

Figure 4: Exports volumes of essential oils of peppermints (including concretes and absolutes) to Asia

0

0.02

0.04

0.06

0.08

0.1

0.12

Period (Years)

Expo

rt Q

uant

ity (t

ons)

Eastern Asia 0 0 0 0 0 0 0 0 0 0.01

South-central Asia 0 0 0 0 0 0 0.009 0 0 0

South-eastern Asia 0 0.1 0 0 0 0 0.027 0.075 0 0

Western Asia 0 0 0 0 0.001 0 0 0.004 0 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 4 shows essential oils of peppermints exports (including concretes and absolutes) from South Africa to Asia between 2001 and 2010 period. During the period under scrutiny, the most attractive market for essential oils of peppermint exports from South Africa to Asia was South-eastern Asia followed by a few exports to Eastern Asia and South-central Asia. The graph further shows that there were very few fluctuations of exports of essential oils of peppermint South-eastern Asia over the same period under examination. Essential oils of peppermint exports from South Africa to South-eastern Asia attained a peak in 2002 at approximately 0.1 tons while Eastern Asia and South-eastern Asia had very low volumes of essential oil exports from South Africa over the same period under examination.

11

Figure 5: Exports volumes of essential oils of peppermints (including concretes and absolutes) to Europe

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Period (Years)

Exp

ort Q

uant

ity (t

ons)

European Union 0 0.001 0 0.001 0 0 0.345 0.12 0.229 0.09

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 5 depicts volumes of essential oils of peppermints exports (including concretes and absolutes) from South Africa to Europe between 2001 and 2010 period. The graph further depicts that essential oils of peppermint were very low in 2002 and 2004, with no exports of essential oils in 2001, 2003 and 2006. The graph also depicts that volumes of essential oils of peppermint exports started to increase in 2007 then a slight decline was experienced in 2008 and 2010. A peak in exports of essential oils of peppermint from South Africa to the European Union was attained in 2007 at approximately 0.345 tons during the same period under examination.

12

Figure 6: Exports volumes of essential oils of peppermints (including concretes and absolutes) to the Americas

0

0.5

1

1.5

2

2.5

Period (Years)

Expo

rt Q

uant

ity (t

ons)

NAFTA 0 0 0 2.269 0 0.08 0.06 0.059 0.001 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 6 indicates volumes of essential oils of peppermints exports (including concretes and absolutes) from South Africa to Americas between 2001 and 2010 period. The figure further indicates that the major export market for essential oils of peppermint from South Africa to Americas was NAFTA. The graph also indicates that there were no exports of essential oils of peppermint from South Africa to NAFTA in 2001, 2002, 2003, 2005 and 2010. Exports of essential oils of peppermint from South Africa to NAFTA attained a peak in 2004 at approximately 2.269 tons.

13

Figure 7: Exports volumes of essential oils of peppermints (including concretes and absolutes) to Oceania

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Period (Years)

Expo

rt Q

uant

ity (t

ons)

Australia and New Zealand 0 0 1.32 0 0 0.35 0 0 0 0.006

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 7 illustrates exports volumes of essential oils of peppermints (including concretes and absolutes) from South Africa to Oceania between 2001 and 2010 period. The figure also illustrates that during the period under scrutiny, the most attractive market in Oceania was Australia and New Zealand. The graph further illustrates that exports of essential oils of peppermint from South Africa to Australia and New Zealand occurred in 2003, 2006 and 2010 with exports of essential oils attaining a peak in 2003 at approximately 1.32 tons. The figure further illustrates that from 2007 to 2009 there were zero exports of essential oils of peppermint to Australia and New Zealand during the same period under scrutiny.

14

Figure 8: Value of essential oils of peppermints exports (including concretes and absolutes) by Provinces

0

100000

200000

300000

400000

500000

600000

700000

Period (Years)

Expo

rts V

alue

(Ran

ds)

Western Cape 40431 0 395203 8625 0 1035 0 25061

Kwazulu-Natal 0 12830 0 0 0 0 0 0

North West 0 0 0 0 0 0 0 3195

Gauteng 285 58043 163216 194436 168241 508045 463932 614280

2002 2003 2004 2005 2006 2007 2008 2009

Source: Quantec Figure 8 shows values of essential oils of peppermints exports (including concretes and absolutes) by provinces of South Africa to the world between 2002 and 2009 period. The figure also shows that the major supplying export markets for essential oils of peppermints from South Africa during the period under review was Gauteng followed by Western Cape, KwaZulu-Natal and North West provinces. Exports of essential oils by Gauteng attained a peak in 2009 at approximately 614 280 kilograms while Western Cape attained its peak in 2004 at approximately 395 203 kilograms. Kwazulu-Natal and North West provinces had very low export volumes of essential oils of peppermint from South Africa to the world.

15

Figure 9: Value of essential oils of peppermints exports (including concretes and absolutes) by Gauteng Province

0

100000

200000

300000

400000

500000

600000

Period (Years)

Expo

rts V

alue

(Ran

ds)

Ekurhuleni MetropolitanMunicipality

271 57623 0 0 39035 314 9438 0

City of JohannesburgMetropolitan Municipality

5 420 163216 194436 129206 507731 395581 445033

City of Tshwane MetropolitanMunicipality

9 0 0 0 0 0 58913 169247

2002 2003 2004 2005 2006 2007 2008 2009

Source: Quantec Figure 9 indicates exports values of essential oils of peppermints (including concretes and absolutes) from Gauteng province to the world between 2002 and 2009 period. The graph also indicates that the City of Johannesburg Metro was the major exporter of essential oils of peppermints followed by City of Tshwane Metro during the period under examination. Exports of essential oils of peppermints by the City of Johannesburg attained a peak in 2007 at approximately 507 731 kilograms while the City of Tshwane Metro attained its peak in 2009 at approximately 169 247 kilograms. The graph further indicates that there were fewer fluctuations in terms of exports of essential oils of peppermints from Gauteng province during the same period under review.

16

Figure 10: Value of essential oils of peppermints exports (including concretes and absolutes) by Western Cape Province

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

Period (Years)

Expo

rts V

alue

(Ran

ds)

City of Cape Town MetropolitanMunicipality

40431 0 395203 8625 0 1035 0 25061

2002 2003 2004 2005 2006 2007 2008 2009

Source: Quantec Figure 10 shows values of exports of essential oils of peppermints (including concretes and absolutes) from Western Cape Province between 2002 and 2009 period. During the same period under examination, the figure also shows that the major exporter of essential oils of peppermints was the City of Cape Town Metro. Exports of essential oils from the City of Cape Town Metro reached a peak in 2004 at approximately 395 203 kilograms. The figure further shows that in 2003, 2006 and 2008, there were no exports of essential oils from the Western Cape Province.

17

Figure 11: Value of essential oils of peppermints exports (including concretes and absolutes) by KwaZulu-Natal Province

0

2000

4000

6000

8000

10000

12000

14000

Period (Years)

Expo

rts V

alue

(Ran

ds)

eThekwini MetropolitanMunicipality

0 12830 0 0 0 0 0 0

2002 2003 2004 2005 2006 2007 2008 2009

Source: Quantec Figure 11 depicts values of exports of essential oils of peppermints (including concretes and absolutes) from KwaZulu-Natal Province between 2002 and 2009 period. During the same period under examination, the figure also depicts that the major exporter of essential oils of peppermints was eThekwini Metro with no competition from the other municipalities. The figure further depicts that exports of essential oils from the Metro attained a peak in 2003 at approximately 12 830 kilograms. The figure also depicts that in 2002 and again in 2004 to 2009 there were no exports of essential oils from the Western Cape Province.

18

4. IMPORTS VOLUMES

Figure 12: Imports volumes of essential oils of peppermints (including concretes and absolutes) from various regions

05

101520253035

Period (Years)

Impo

rt Q

uant

ity (t

ons)

Africa 0 0 0 0 0.003 0 0 0.12 0 0

Americas 29.695 22.15 28.923 15.424 11.304 10.663 13.492 11.495 14.104 9.897

Asia 2.135 3.512 4.198 1.655 3.65 1.9 1.25 1.175 4.469 10.874

Europe 15.358 16.968 19.764 20.222 19.921 18.452 15.323 15.185 10.546 8.367

Oceania 0 0 0 0 0 0 0 0 0.013 0.016

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 12 shows imports volumes of essential oils of peppermints (including concretes and absolutes) from various regions to South Africa between 2001 and 2010 period. During the same period under review, the major import markets for essential oils of peppermint including concretes and absolutes were from the Americas followed by Europe and Asia. Africa and Oceania had very low levels of imports of essential oils of peppermint including concretes and absolutes during the same period under review. Between 2001 and 2010, essential oils of peppermint including concretes and absolutes imports from the Americas, Europe and Asia to South Africa had fewer fluctuations. Imports of essential oils from Americas to South Africa attained a peak in 2001 at approximately 29 695 tons while imports of essential oils of peppermint from Europe to South Africa attained a peak in 2004 at approximately 20 222 tons. Imports of essential oils of peppermint including concretes and absolutes from Asia to South Africa attained a peak in 2010 at approximately 10 874 tons. Figure 12 in comparison with figure 1 shows that South Africa is importing more tons of essential oils of peppermint from the Americas as compared to what South Africa is exporting to the Americas during the same period under review.

19

Figure 13: Imports volumes of essential oils of peppermints (including concretes and absolutes) from Africa

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

Period (Years)

Impo

rt Q

uant

ity (t

ons)

SADC 0 0 0 0 0.003 0 0 0.12 0 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 13 indicates imports volumes of essential oils of peppermints (including concretes and absolutes) from Africa to South Africa between 2001 and 2010 period. The figure further indicates that the only import market of essential oils of peppermint from Africa to South Africa was SADC region with no imports in 2001 to 2004 and again in 2006, 2007, 2009 and 2010 years. Imports of essential oils of peppermint from SADC region to South Africa started to increase in 2005 and attained a peak in 2008 at approximately 0.12 tons. Figure 13 as compared to figure 2 clearly indicates that the demand for essential oils of peppermint from Africa to South Africa was less as compared to what South Africa imported from US, Europe and Asia during the same period under scrutiny.

20

Figure 14: Imports volumes of essential oils of peppermints (including concretes and absolutes) from SADC

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

Period (Years)

Impo

rt Q

uant

ity (t

ons)

Zimbabwe 0 0 0 0 0 0.003 0 0 0.12 0 0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 14 depicts imports volumes of essential oils of peppermints (including concretes and absolutes) from the SADC region to South Africa between 2001 and 2010 period. The figure further indicates that the only import market of essential oils of peppermint from the SADC region to South Africa was Zimbabwe with no competition from other SADC countries. The figure also depicts that there were no imports of essential oils of peppermint from Zimbabwe to South Africa between 2001 and 2004 and again in 2006, 2007, 2009 and 2010 years. Imports of essential oils of peppermint from Zimbabwe to South Africa started to increase in 2005 and attained a peak in 2008 at approximately 0.12 tons.

21

Figure 15: Imports volumes of essential oils of peppermints (including concretes and absolutes) from the Americas

0

5

10

15

20

25

30

35

Period (Years)

Impo

rt Q

uant

ity (t

ons)

South America 3.898 0 0 0.54 0 0 0.9 0.72 0 0

NAFTA 25.797 22.15 28.923 14.884 11.304 10.663 12.592 10.775 14.104 9.897

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 15 illustrates volumes of imports of essential oils of peppermints (including concretes and absolutes) from the Americas to South Africa between 2001 and 2010 period. The graph further illustrates that major import market for essential oils of peppermint from the Americas was NAFTA followed by very low imports from South America during the period under review. Imports of essential oils of peppermint from NAFTA started to increase in 2001 then a slight decline in 2002 until a peak was attained in 2003 at approximately 28, 923 tons while imports of essential oils of peppermint from South America attained a peak in 2001 at approximately 3, 898 tons. The figure also illustrates that from 2004 to 2006 there was a consistent decline in imports of essential oils of peppermint from NAFTA to South Africa due to the high tariffs agreements and that let to less imports entering the Borders of South Africa during the same period under review.

22

Figure 16: Imports volumes of essential oils of peppermints (including concretes) and absolutes from Asia

0

2

4

6

8

10

Period (Years)

Impo

rt Q

uant

ity (t

ons)

Eastern Asia 0.385 1.9 0.615 0.82 1.287 1.22 0.35 0.592 0.635 1.605

South-central Asia 1.75 1.612 3.583 0.09 2.363 0.68 0.357 0.583 2.751 9.269

South-eastern Asia 0 0 0 0.72 0 0 0.543 0 1.083 0

Western Asia 0 0 0 0.025 0 0 0 0 0 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 16 represents volumes of imports of essential oils of peppermints (including concretes and absolutes) from Asia to South Africa between 2001 and 2010 period. The graph also shows that import markets for essential oils of peppermint from Asia to South Africa were from South-central Asia followed by Eastern Asia and South-eastern Asia. Imports of essential oils of peppermint from South-central Asia to South Africa started to increase in 2001 with a slight decline in 2002, then an increase in 2003 until the lowest levels of imports were attained in 2004 at approximately 0.09 tons. Imports of essential oils of peppermint from South-central Asia to South Africa attained a peak in 2010 at approximately 9,269 tons.

23

Figure 17: Imports volumes of essential oils of peppermints (including concretes and absolutes) from Europe

0

10

20

30

40

50

60

Period (Years)

Impo

rt Q

uant

ity (t

ons)

Western Europe Rest 0 0 50 0 0.059 0 0 0 0 0

European Union 15.358 16.968 19.714 20.222 19.862 18.452 15.323 15.185 10.546 8.367

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Quantec Figure 17 indicates imports volumes of essential oils of peppermints (including concretes and absolutes) from Europe to South Africa between 2001 and 2010 period. The figure further indicates that Western Europe commanded the greatest share in terms of imports of essential oils from Europe followed by the European Union. The graph also indicates that imports of essential oils from Western Europe reached a peak in 2003 at approximately 50 tons while imports of essential oils of peppermint from the European Union attained a peak in 2004 at approximately 20,222 tons. There were no imports of essential oils of peppermint from Western Europe to South Africa from 2001, 2002, 2004 and again in 2006 to 2010 years while in the European Union there were imports of essential oils of peppermint to South Africa almost every year.

24

5. USES OF ESSENTIAL OILS

• Most essential oils are used for cooking, potpourri, crafting, cosmetics, massage, aromatherapy and other uses.

• Other essential oils are used to repel insects and other arthropods that are pests of humans, livestock, and pets (mosquitoes, fleas, ticks, etc).

• There are four broad sectors in which the oils are also used, including the flavor, pharmaceutical, personal care and industrial.

It is important to note that essential oils are not the same as perfume or fragrance oils. Where essential oils are derived from true plants, perfume oils are artificially created fragrances or contain artificial substances and do not offer the therapeutic benefits that essential oils offer. With so many plant species from which essential oil products are sourced it is even more problematic to accurately classify which plant belongs to which plant family or species. However, among the plants notable for their essential oils are members of the following plant families: carrot, ginger, heath, laurel, mint, myrtle, olive, orchid, pulse, rose and rue. Table 4: Common uses of selected essential oils

Essential oils Common uses

Citrus Industrial solvent, fragrance for cleaning products, flavoring

Spearmint Toothpaste, mouthwash, confectionery flavoring

Peppermint Toothpaste, mouthwash, chewing gum, food flavoring, cosmetics, and tobacco

Lavender/ Lavendin Fragrances and toiletries Eucalyptus Cough/cold remedies, solvents, cleaning

agents, flavoring Tea tree Toiletries, insect repellents, germicides,

cosmetics Boronia Food flavoring, fragrance Blackcurrant bud Food and beverage flavoring

Source: South African Essential Oils Producers Association (SAEOPA) Table 4 above shows the list of common uses for selected essential oils in different industries. There are a number of uses for essential oils in general with some of those uses mentioned above. The table indicates that most of

25

the essential oils are used interchangeably in all segments, with most of them being used mainly in the food flavoring. Table 5: Overview of end-user sectors markets

Sectors Segments Essential oils

Cosmetic industry Personal care Soap and detergent Dental care

• Lemon • Peppermint • Orange • Patchouli • Rosewood • Mint • Spice • Eucalyptus and

derivatives

Food industry Soft drink Confectionery Tobacco Candy Processed and canned food products Chewing gum

• Citrus • Spice oleoresins • Vanilla • Flavor and floral oils • Oleoresins • Peppermint

Pharmaceutical industry Homeopathy Health-care products Aromatherapy

• Orange • Citrus • Patchouli • Lavender • Geranium

Source: South African Essential Oils Producers Association (SAEOPA) Table 5 shows the overview of the end user sectors markets for different kind of essential oils. It is indicated that most essential oils are mainly used in three sector markets such as the cosmetic industry, food

26

industry and the pharmaceutical industry. The essential oils of orange and patchouli are used in both the cosmetic industry and also in the pharmaceutical industry, followed by the use of essential oils of orange in the food and pharmaceutical industry. These indicate that the essential oils can in a given time period perform different kind of functions or uses in different industries.

6. QUALITY & MAINTANANCE OF ESSENTIAL OILS Over and above the barriers to entry alluded to above there is also the issue of quality. Entering lucrative industries such as the rose and boronia can be difficult as they have exceptionally rigid quality standards which require sophisticated equipment to attain/extract from the plants. Above the general quality requirements, storage of the product is also highly important as it can compromise quality. Storage materials should be solid and should be glass bottles; aluminum bottles and drums (used mostly for expensive essential oils), lacquered and lined steel drums, and plastic drums in high density polyethylene, which are less expensive than lined steel drums. Before they are stored for shipment oils should be dried by filtration or the use of anhydrous calcium sulphate. Head space should be filled with nitrogen gas although carbon dioxide is cheaper and easier to source in developing countries. The danger with using carbon dioxide though, is that it might react with residual moisture to form carbonic acid, which may react with essential oil ingredients.

7. ESSENTIAL OIL VALUE CHAIN ANALYSIS Essential oils in the value chain are generally used ‘as is’ when dealing with the flavor and fragrance industry, especially with the minor or smaller oils, such as rose geranium. Only some oils are further processed and made into synthetic chemicals. It is also important to know the different role players that are a part of this value chain. One of the main organizations is the South African Essential Oils Producers Association (SAEOPA). SAEOPA was formed in 2000 as an alternative to the council for Scientific and Industrial Research, as a source of information about current and potential producers. It is a voluntary association and has an objective to support its members, who primarily comprise producers of essential oils. The organization (SAEOPA) supports its members throughout the value chain, beginning with the sharing of information on agricultural issues and ending with marketing matters.

27

28

The other role players in the essential oils value chain can be identified as; Growers, Distillers, Researchers, Government, Marketers and also the Consumers or Buyers. The value chain for essential oils is illustrated on the figure below.

Purification

Flavor/ Perfume Essences

Natural Raw Materials

Solvent Extraction, Distillation etc.

-Retinoid -Oleoresins -Essential Oils

Further Chemical/ Biological Modification

Aroma Chemicals

Organic Synthesis, biological catalysis

Compounded Flavors and Fragrances

-Foods -Cosmetics -Toiletries -etc

Chemicals

29

Source: SAEOPA (South African Essential Oil Producer Association)

Diagram 1: Processing of essential Oils

The value chain of Essential Oils basically follows this pattern identified on Diagram 2 below. Diagram 2: Value chain pattern of the Essential oils

Crop Cultivation Input Supplier

Further Beneficiation • Rectification, • Fractionating, • Formulations

Consumer

Sales & Marketing • Market

Knowledge • Market

Reputation • Market Access

Primary Processing • Drying • Distillation

Crop Selection

30

The value chain at farm gate and wholesale levels vary greatly across products such that it is impossible to develop stylized value chains. Diagram 2 represents the general essential oils’ value chain summarized in seven stages, which can be described as follows;

• The crop selection stage provides knowledge about the local soil, climate, correct genotype and potential markets.

• Crop cultivation stage which gives the sourcing of plant material (seeds or seedling), planting, crop management (pests and irrigation) and harvesting;

• Input Supply stage which provides information about the correct measure and application of different inputs according to the crop requirements.

• Primary processing stage shows the application of drying, distillation, quantities (economic yields), qualities (chemical and sensory qualities) and certification.

• Further beneficiation involves rectification, fractionating and formulations; and

• Sales and marketing inform about the market knowledge, reputation and market access.

While it is difficult to quantify costs from farm gate to wholesale levels, it is estimated that harvesting costs make up between 10 to 35% of farm gate costs, with an average of 22%. Pest, weed and disease management costs are about 11 to 37%, with a mean of 22%. Nutrition, which includes irrigation and fertilizers are about 10% of grower costs. At wholesale level there is even greater variability as it depends on the extent of refinement and processing of the oil. Extraction costs are estimated to range between 60 to 75% of processor costs.

31

Diagram 3: Essential Oil Value Chain Tree

Flavor Industry

Traders, Agents & Brokers

Fragrance Industry

End Users

Cosmetic Industry • Personal

care • Soap &

Delegent • Dental Care

Food Industry • Soft drink • Confectionery • Tobacco • Candy • Processed &

canned food • Chewing gum

Pharmaceutical Industry • Homeopathy • Health-care

products • Aromatherapy • massage

PRODUCERS

Diagram 3 above represents the various industries that are fully playing a part in the use of essential oils. Farmers can produce Essential oils and sell directly to the fragrance industry, flavor industry and to the traders who can also supply the flavor industry. The fragrance industry and traders may also buy the product directly from the producer and supply the end users, and after which the products reached the end users, is

32

then supplied to the three different industries specifically, the cosmetic, food, and the pharmaceutical industry.

8. ESSENTIAL OILS DISTRIBUTION CHANNELS International trade for the bulk essential oils (like citrus) takes place on a large scale. Shipments may be diverted to neighboring countries, and there is a substantial re-export business. Most of the leading traders in the European Union supply several countries. The re-exports are important, as they can reduce the effect of supply irregularities and domestic imbalances in supply and demand caused by the vagaries of climate, crop disease, inadvertent overstocking or unexpected peaks in demand. Some producers will bargain directly with major end-users. Other producers will sell through independent traders (importers) or sales agents. Figure below shows the various distribution channels for essential oils.

Diagram 4: Essential Oils Distribution Channels

Foreign Producers/ Exporter

Broker/ Agent Importer/ Trader

Processing Industry Food/ Cosmetic/ Pharmaceutical Industry

Re-export Retail Trade

Re-export

There are four major types of business partners for exporters of essential oils such as; Agents, Importers or Traders, The processing industry (processing importer), and the end product manufacturers. The trade structure illustrated in figure 4 changes constantly, the distribution channels and the specific functions mentioned are not as clear-cut as they might seem. However, sixty to eighty percent (60-80%) of the essential oil trade goes directly from producers or exporters to processing importers such as the multinational flavor houses. An advantage of processing importers is that they can create a total flavor composition

33

and give excellent service. This can facilitate co-operation with end-product manufactures in the food or cosmetic industries. Many end-product manufacturers do not usually purchase essential oils directly from producers. The essential oil market is somewhat fragmented between the following end-user market sectors; Aromatherapy, Natural personal care and pharmaceutical, Flavor and Fragrance, Cosmetics and Beverages.

8.1 Value Adding in South Africa The production process and people involved vary depending on the type and end use of the product. Common stages of production include growing and harvesting the crop, extraction, further processing and the oil, increasing its suitability for end use. Value adding in the form of products such as creams, bath salts, candles, potpourri, and gifts has proved more profitable for producers in South Africa. The booming tourism industry has contributed to the success and survival of producers in difficult times.

34

9. MARKET ACCESS Table 6 below shows tariffs that are applied by various countries to the exports of essential oils (nes) originating from South Africa.

Source: ITC Market Access Map

COUNTRY (IMPORTERS)

PRODUCT DESCRIPTION

TRADE REGIME DESCRIPTION

APPLIED TARIFFS 2010

ESTIMATED TOTAL AD VALOREM EQUIVALENT TARIFF 2010

Canada Ess oils, whether or not terpeneless, incl concretes.

MFN duties (Applied)

0.00% 0.00%

China Ess oils, whether or not terpeneless, incl concretes.


20.00% 20.00%

China Ess oils, whether or not terpeneless, incl concretes(excl. those of citrus fruit & mint)


15.00% 15.00%

Terpenic oils of clove, niaouli & ylang-ylang, incl concretes & absolutes.


0.00% 0.00% France

Terpenic oils of clove, niaouli & ylang-ylang, incl concretes & absolutes.

Preferential tariff for South Africa

0.00% 0.00%

Germany Terpeneless oils of clove, niaouli & ylang-ylang, incl concretes & absolutes.


0.00% 0.00%

India Ess oils (terpeneless or not), including concretes & absolutes, resinoids, extracted oleoresins, concentrates of ess oils in fats.


20.00% 20.00%

Spain

Terpeneless oils of clove, niaouli & ylang-ylang, incl concretes & absolutes.


0.00% 0.00%

United Kingdom



2.30%

2.30%



0.00% 0.00%

35

Table 6 indicates the level of tariffs applied by various countries to the essential oil (nes) originated from South Africa during the year 2010. The table further indicates that countries such as France, Germany and India applied equal tariffs of 0.00% to essential oils (nes) originating from South Africa. Table 7 below indicates tariffs that are applied by various countries to the exports of essential oils of peppermints from South Africa.

COUNTRY (IMPORTERS)

PRODUCT DESCRIPTION




Belgium Terpenic oils of peppermint “Mentha piperita”, incl. concretes & absolutes.


0.00% 0.00%

Brazil Oleos essenciais (desterpenados ou nao), incl. os chamados (concretos) ou.


14.00% 14.00%

China Oils of peppermint Mentha piperita, whether or not terpeneless, incl concretes & absolutes


15.00% 15.00%

Terpeneless oils of peppermint “Mentha piperite”, incl. concretes & absolutes


2.90% 2.90% Germany

Terpeneless oils of peppermint “Mentha piperite”, incl. concretes & absolutes


0.00% 0.00%

Nigeria Oils of peppermint Mentha piperita, whether or not terpeneless, incl concretes &


10.00% 10.00%

36

absolutes

United Arab Emirates

Essential oils (terpeneless or not), incl. concretes & absolutes, resinoids, extracted oleoresinoids.


5.00% 5.00%

Zimbabwe Oils of peppermint Mentha piperita, whether or not terpeneless, incl concretes & absolutes


0.00% 0.00%

Source: ITC Market Access Map Table 7 shows the level of tariffs applied by various countries to the essential oil of peppermint originated from South Africa during the period 2010. Exports of essential oils of peppermint from South Africa to the SADC region (Zimbabwe) were free due to the fact that South Africa is part of SADC. Non SADC countries such as China, United Arab Emirates and Brazil charged South Africa a tariff of 5.00%, 14.00% and 15.00% respectively. There was no tariff barrier for South African essential oils of peppermint exports from South Africa to Germany and Belgium because of the common trade agreement between South Africa and the European Union, which makes it for all EU countries to maintain a preferential tariff of 0.00% for South African products. Table 8 below reflects tariffs that are applied by various countries to the exports of essential oils of other mints from South Africa. COUNTRY (IMPORTERS)

PRODUCT ESCRIPTION TRADE REGIME DESCRIPTION



Angola Oleos essencias de mentas, desterpenizados ou nao, incl. os chamados


5.00% 5.00%

Argentina Terpenic oils of clove, niaouli & ylang-ylang, incl concretes & absolutes.


12.00% 12.00%

Belgium Terpeneless oils of mints, incl. concretes & absolutes (excl. those of


0.00% 0.00%

37


peppermint “Mentha piperita”)

Brazil Oleos essencias de mentas, desterpenizados ou nao, incl. os chamados


12.00% 12.00%

Chile

Aceites esenciales (desterpenados o no), incl los concretes & absolutes


6.00% 6.00%

Congo

Huiles essentielles de menthes, deterpenees ou non, y.c. celles dites.


10.00% 10.00%

Germany

Terpeneless oils of mints, incl. concretes & absolutes (excl. those of peppermint “Mentha piperita”)


0.00%

0.00%

Italy Terpeneless oils of mints, incl. concretes & absolutes (excl. those of peppermint “Mentha piperita”)


0.00% 0.00%

Spain Terpeneless oils of mints, incl. concretes & absolutes (excl. those of peppermint “Mentha piperita”)


0.00% 0.00%

Table 8 depicts tariffs that are applied by various countries to the exports of essential oils of other mints from South Africa during the 2010 period. The table further depicts that there was no tariff barrier for South African essential oils of peppermint exports from South Africa to Germany, Belgium, Italy and Spain because of the common trade agreement between South Africa and the European Union, which makes it for all EU countries to maintain a preferential tariff of 0.00% for South African products. Angola which falls under SADC agreement charged South Africa a tariff of 5.00% for essential oils of other mints exported by South Africa during the period under scrutiny.

38

Table 9 below illustrates tariffs that are applied by various countries to the exports of essential oils of oranges from South Africa.


COUNTRY (IMPORTERS)

PRODUCT DESCRIPTION




China Oils of sweet & bitter orange, whether or not terpeneless, incl. concretes & absolutes (excl. orange flower oil)


20.00% 20.00%

France Oils of sweet & bitter orange, whether or not terpeneless, incl. concretes & absolutes (excl. orange flower oil)


0.00% 0.00%

India Ess oils (terpeneless or not), including concretes & absolutes, resinoids, extracted oleoresins, concentrates of ess oils in fats.


20.00% 20.00%

Mozambique

Oils of sweet & bitter orange, whether or not terpeneless, incl. concretes & absolutes (excl. orange flower oil)


2.50% 2.50%

Mozambique

Oils of sweet & bitter orange, whether or not terpeneless, incl. concretes & absolutes (excl. orange flower oil)


0.00% 0.00%

Netherlands

Terpenic oils of sweet & bitter orange, incl. concretes & absolutes (excl. orange-flower oil)


0.00% 0.00%



7.00% 7.00% Spain



0.00% 0.00%

United Arab Emirates

Ess oils (terpeneless or not), including concretes & absolutes, resinoids, extracted oleoresins, concentrates of ess oils in fats.


5.00% 5.00%

Zimbabwe Oils of sweet & bitter orange, whether or not terpeneless, incl. concretes & absolutes (excl. orange flower oil)


5.00% 5.00%

39

Table 9 illustrates tariffs that are applied by various countries to the exports of essential oils of oranges from South Africa during the 2010. The table further illustrates that countries such as France, Mozambique and Netherlands had free trade agreements under EU and SADC. Asian countries applied a tariff of 20.00% to essential oils of oranges originating from South Africa during the period under examination. Table 10 below depicts tariffs that are applied by various countries to the exports of essential oils of lemon from South Africa.


COUNTRY (IMPORTERS)

PRODUCT DESCRIPTION




Canada Ess oils of lemon, whether or not terpeneless, incl concretes.


0.00% 0.00%

China Ess oils, whether or not terpeneless, incl concretes.


20.00% 20.00%

Japan Lemon oil MFN duties (Applied)

0.00% 0.00%

Norway Ess oils (terpeneless or not), including concretes & absolutes, resinoids, extracted oleoresins, concentrates of ess oils in fats.


0.00% 0.00%

Spain



0.00% 0.00%

Spain

Terpeneless oils of lemon, incl. concretes & absolutes.


7.00% 7.00%

Sri Lanka Oils of lemon whether or not terpeneless, incl. concretes and absolutes.


15.00% 15.00%

Switzerland

Huiles essentielles de citron,

Preferential tariff for SACU

0.00% 0.00%

United Kingdom



2.30% 2.30%



0.00% 0.00%

Uganda Oils of lemon whether or not terpeneless, incl. concretes and absolutes.


0.00% 0.00%

Table 10 represents tariffs that are applied by various countries to the exports of essential oils of lemon from South Africa during the 2010

40

41

period. The table again further shows that South Africa and EU had a free trade agreement which led to 0.00% tariffs applied by Canada, Spain and United Kingdom. Japan also had a free tariff agreement with South Africa during the same period which led to 0.00% tariff by Japan. Uganda also had a free tariff agreement with South Africa during the same period which led to 0.00% tariff.

10. MARKET INTELLIGENCE Table 11: List of importing markets for Essential oils (nes) exported by South Africa in 2009 Product: 330129

Trade Indicators

Importers Exported value

2009, USD thousand

Share in South Africa's

exports, %

Exported quantity 2009

(tons)

Unit value,

(USD/unit)

Exported growth in value between 2005-2009, %, p.a.

Exported growth in quantity

between 2005-2009, %, p.a.


Share of partner

countries in world imports,

%

Tariff (estimated)

faced by South Africa

'World 4074 100 360 11317 -10 -6 -19 100

'Germany 990 24.3 107 9252 2 0 25 9.1 '0

'France 540 13.3 38 14211 -17 -15 -26 13.2 '0

'Australia 329 8.1 42 7833 -8 -17 -30 1.3 '0

'Zambia 254 6.2 13 19538 14 9 36 0 '0

'United States of America 228 5.6 9 25333 -30 -9 10 16.9 '0

'Switzerland 199 4.9 2 99500 -24 7 -37 7.3 '0

'Mauritius 190 4.7 65 2923 9 7 -18 0.1 '0

'United Kingdom 179 4.4 7 25571 -21 7 -61 7.4 '0

'Mozambique 176 4.3 8 22000 12 -30 -73 0 '0

'Singapore 167 4.1 3 55667 45 161 4 '0

'Malawi 156 3.8 15 10400 4 -3 -1 0 '0

'Spain 116 2.8 15 7733 -9 4 -33 4.6 '0

'Netherlands 94 2.3 1 94000 -39 -39 4 2.3 '0

'India 89 2.2 1 89000 -9 -44 98 3.8 '20

'Uganda 59 1.4 3 19667 89 64 0 '0

'Congo 49 1.2 6 8167 53 53 345 0 '10

'Canada 37 0.9 0 1.6 '0

42

Trade Indicators


2009, USD thousand


exports, %


(tons)

Unit value,

(USD/unit)



between 2005-2009, %, p.a.

Tariff Share of Exported

(estimated) partner growth in value

faced by countries in between 2008-

South Africa world imports, 2009, %, p.a.

%

'Zimbabwe 37 0.9 13 2846 -12 -10 236 0 '5

'China 35 0.9 0 400 2.3 '18.8

'Indonesia 28 0.7 0 24 27 0.1 '5

'Kenya 26 0.6 3 8667 26 16 -13 0.1 '0

'Mexico 12 0.3 0 93 140 3 '4.4

'Brazil 11 0.3 0 -7 -21 2.2 '10.8

'Belgium 10 0.2 3 3333 -12 32 -41 1.2 '0

'Lithuania 10 0.2 0 233 0 '0

'Japan 8 0.2 0 -54 5.3 '0

'Ethiopia 5 0.1 1 5000 -15 -10 150 0 '30

'Nigeria 5 0.1 0 54 67 0.1 '10

'United Arab Emirates 5 0.1 0 -22 -29 '5

'Argentina 4 0.1 0 0.7 '10.8

'Democratic Republic of the Congo 4 0.1 0 0 '10

'Austria 3 0.1 0 -36 0 1.4 '0

'Hong Kong, China 3 0.1 0 50 0.8 '0

'Seychelles 3 0.1 1 3000 0 -25 0 '0

'Algeria 2 0 0 0 '5

'Hungary 2 0 0 0.3 '0

'Italy 2 0 0 2 '0

'Saudi Arabia 2 0 0 '5

43

44

Trade Indicators


2009, USD thousand


exports, %


(tons)

Unit value,

(USD/unit)



between 2005-2009, %, p.a.


Share of partner

countries in world imports,

%

Tariff (estimated)


'United Republic of Tanzania 2 0 0 32 -50 0.1 '0

'Djibouti 1 0 0 0 '26

'Greece 1 0 0 0.1 '0

'Ireland 1 0 0 -19 1 '0

Source: ITC Trade Map

45

Table 11 indicates the list of importing markets for Essential oils (nes) exported by South Africa in 2009. The table also indicates that during 2009 South Africa exported a total of 360 tons of essential oils (nes) to the world, with greater volumes being exported to Germany followed by Mauritius, Australia and France. The table further indicates that Germany as the leading import market commanded the greatest share of South Africa’s essential oils (nes) exports. Exports of essential oils (nes) to France experienced a decrease of about 15% and 17% in both value and quantity between the periods 2005 and 2009. During the year period between 2008 and 2009, Germany has also decreased its value of the essential oils (nes) imports from South Africa by almost 26%.

46

Figure 18: Performance of South African essential oils (nes) in 2009


47

Figure 18 shows that Germany, France and the United States of America were the biggest import markets for essential oils (nes) exported by South Africa in 2009. The figure also shows growth in demand for essential oils (nes) exports from South Africa in 2009 period. The figure further shows that South Africa’s annual growth in demand to Uganda during the period 2009 was high at 90% and at the same time Uganda’s annual growth from the world also increased to 70%. However, countries such as Indonesia, Zambia, and Mauritius increased their share of essential oils (nes) imports to the total South Africa’s exports growth but decreased their annual growth of imports from the world.

48

Figure 19: Diversification of markets for essential oils (nes) exported by South Africa in 2009


49

Figure 19 indicates diversification of markets for essential oils (nes) exported by South Africa in 2009. The figure further indicates that the United States, France and Germany were the main markets for essential oils (nes) exported by South Africa between 2005 and 2009 periods. Germany commanded the greatest share in South Africa’s exports in 2009 at approximately 24%. If South Africa were to look for alternative options in terms of export markets for essential oils (nes) markets exist in Uganda, India, Zimbabwe and Congo. The same small markets (countries) of essential oils (nes) mentioned above were importing less essential oils (nes) from South Africa but more from the world between 2005 and 2009 periods.

50

Table 12: List of exporting markets for essential oils (nes) imported by South Africa in 2009 Product: 330129

Trade Indicators

Exporters Imported value

2009, USD thousand

Share in South Africa's imports, %

Imported quantity 2009

(tons)

Unit value, (USD/unit)

Imported growth in value between 2005-2009, %,

p.a.

Imported growth in quantity between

2005-2009, %, p.a.

Imported growth in value between 2008-2009, %, p.a.

Share of partner countries in

world exports, %

Tariff (estimated) applied by South

Africa

'World 3378 100 182 18560 7 1 3 100

'United Kingdom 759 22.5 33 23000 1 -7 9 3.9 '0

'China 472 14 74 6378 59 51 126 11.4 '0

'India 365 10.8 14 26071 23 22 -22 3 '0

'Australia 347 10.3 13 26692 18 23 -37 1.9 '0

'France 297 8.8 8 37125 8 14 26 22.5 '0

'United States of America 215 6.4 11 19545 -20 -16 -10 8.2 '0

'Germany 113 3.3 7 16143 7 6 -4 4 '0

'Singapore 104 3.1 6 17333 84 39 136 3.6 '0

'Spain 90 2.7 1 90000 -15 -50 61 5 '0

'Canada 82 2.4 3 27333 120 41 1 '0

'Netherlands 73 2.2 0 -14 -6 1.8 '0

'Italy 66 2 2 33000 34 -31 288 0.6 '0

'Austria 57 1.7 0 36 104 2 '0

'Madagascar 52 1.5 2 26000 22 19 -55 2 '0

'Malawi 51 1.5 0 28 0 '0

'Rwanda 36 1.1 0 16 '0

'Mozambique 29 0.9 1 29000 '0

'Area Nes 29 0.9 0 71

'Israel 21 0.6 1 21000 12 110 2 '0

'Switzerland 21 0.6 0 29 200 4.1 '0

'Belgium 18 0.5 0 0 -33 0.8 '0

'Republic of Moldova 14 0.4 0 0.2 '0


51

Table 12 illustrates the list of exporting markets for essential oils (nes) imported by South Africa in 2009. The table further illustrates that during 2009, South Africa imported a total of 182 tons of essential oils (nes) from the world. The table also illustrates that the United Kingdom was the biggest importing market of essential oils (nes) in terms of value at approximately US$ 759 followed by China at approximately US$ 472 for South Africa. At the same time, in volume terms the United Kingdom exported less quantities of essential oils (nes) to South Africa of about 33 tons as compared to China which exported 74 tons during the same period under review. South Africa’s imports from China increased by 59% and 51% (in value and volume terms respectively) as compared to imports from the United Kingdom that decreased by 1% and 7% in value and quantity during the same period under review. During 2009 the United Kingdom, China, India and Australia were the major suppliers of essential oils (nes) imported by South Africa, with the UK commanding the greatest share (22.5%) of South Africa’s essential oils’ imports followed by China with 14% share, India with 10.8% share and Australia with 10.3% share.

52

Figure 20: Competitiveness of suppliers to South Africa for essential oils (nes) imported by SA in 2009


53

Figure 20 shows competitiveness of suppliers to South Africa for essential oils (nes) imported by South Africa in 2009. The figure further shows that France, United States of America and China were the biggest suppliers of essential oils (nes) imported by South Africa during the same period under review. The figure also shows that Canada (even though a small market) was the most competitive supplier of essential oils to South Africa’ between 2005 and 2009 at 100% followed by Singapore at 85%.

54

Figure 21: Market diversification for essential oils (nes) imported by South Africa in 2009


55

Figure 21 indicates market diversification for essential oils (nes) imported by South Africa in 2009. The figure further indicates that France, United States of America and China were the biggest suppliers of essential oils, (nes) to South Africa during the period under scrutiny. The graph also indicates that if South Africa had to diversify its suppliers of essential oils, nes, small and attractive markets exist in Italy, Switzerland, Canada Austria and Singapore.

56

Table 13: List of importing markets for essential oils of lemon exported by SA in 2009 Product: 330113

Trade Indicators


2009, USD thousand

Share in South Africa's exports, %


(tons)


Exported growth in value between

2005-2009, %, p.a.

Exported growth in quantity between

2005-2009, %, p.a.


Share of partner countries in world

imports, %

Tariff (estimated)


'World 4907 100 274 17909 12 -15 -46 100

'United States of America 2663 54.3 123 21650 4 -17 -44 28.6 '0

'Netherlands 1335 27.2 90 14833 39 7 138 2 '0

'United Kingdom 345 7 31 11129 3 9 -55 16.4 '0

'Ireland 267 5.4 16 16688 -43 3.4 '0

'France 133 2.7 6 22167 38 3 51 4.8 '0

'Japan 124 2.5 5 24800 -81 9.5 '0

'Spain 31 0.6 2 15500 -97 0.4 '0

'Zimbabwe 5 0.1 1 5000 -32 -46 0 0 '5

'Canada 2 0 0 -38 2.1 '0

'Germany 2 0 0 4 '0

'Malawi 1 0 0 0 '0


57

Table 13 depicts the list of importing markets for essential oils of lemon exported by South Africa in 2009. The table further depicts that the biggest importing markets for essential oils of lemon were United States of America, Netherlands and United Kingdom. The table also depicts that during the same period under examination, South Africa exported 274 tons of essential oils of lemon to the world. United States of America imported 123 tons of essential oils of lemon while Netherlands imported 90 tons of essential oils of lemon during the same period. South Africa’s exports of essential oils of lemon to the United States of America increased by 4% in value and the quantity decreased by 17% between 2005 and 2009 periods. South Africa’s exports of essential oils of lemon to Netherlands increased in value by 39% and in quantity by 7% between 2005 and 2009 periods. United States of America also had a highest share in South Africa’s essential oils of lemon imports of about 54.3% as compared to Netherlands with 27.2% share.

58

Figure 22: Growth in demand for essential oils of lemon exported by SA in 2009


59

Figure 22 represents growth in demand for essential oils of lemon exported by South Africa in 2009. The figure shows that the United States of America and United Kingdom were the biggest import markets of essential oils of lemon exported by South Africa. The figure also shows that South Africa’s exports of essential oils of lemon to Netherlands grew at about 39%, as compared to our exports of essential oils of lemon to France which grew at about 38%. The graph further shows that Netherlands was an attractive dynamic market for exports of essential oils of lemon with an annual growth of 39 % while France was a declining market (in world terms) but with an annual growth of 38%.

60

Figure 23: Prospects for market diversification for essential oils of lemon exported by SA in 2009


61

Figure 23 shows prospects for market diversification for essential oils of lemon exported by South Africa in 2009. The figure shows that United States of America followed by United Kingdom were the biggest import markets of essential oils of lemon from South Africa during the same period under review. The graph also shows that if South Africa had to diversify its markets of essential oils of lemon, potential export markets exist in Netherlands and France.

62

Table 14: List of supplying markets for essential oils of lemon imported by SA in 2009 Product: 330113

Trade Indicators


2009, USD thousand

Share in South Africa's imports,

%


(tons)


Imported growth in value between

2005-2009, %, p.a.


2005-2009, %, p.a.

Imported growth in value between

2008-2009, %, p.a.


exports, %

Tariff (estimated) applied by

South Africa

'World 548 100 62 8839 20 49 -26 100

'United States of America 284 51.8 14 20286 300 -32 12 '0

'Israel 80 14.6 1 80000 13 0 33 '0

'Zimbabwe 55 10 40 1375 25 111 686 0 '0

'Netherlands 41 7.5 4 10250 -13 41 215 1.1 '0

'Germany 31 5.7 0 129 -53 3.5 '0

'Switzerland 20 3.6 0 -12 5 2.1 '0

'France 17 3.1 1 17000 1 0 -26 4.4 '0

'United Kingdom 8 1.5 1 8000 -11 0 -38 5.1 '0

'Italy 6 1.1 0 -39 -65 9.6 '0

'India 4 0.7 0 0 '0

'Argentina 3 0.5 0 8 -25 44.1 '0

'Canada 1 0.2 0 1.9 '0


63

Table 14 shows the list of supplying markets for essential oils of lemon imported by South Africa in 2009. The table further depicts that South Africa imported a total of 52 tons of essential oils of lemon from the world during the period under review. This is due to the fact that South Africa was a net exporter of essential oils of lemon (274 tons) during the same period under scrutiny. In world terms, United States of America and Zimbabwe commanded the greatest export market share for essential oils of lemon to South Africa. In 2009 South Africa’s imports of essential oils of lemon from Zimbabwe increased in both value and quantity at approximately 25% and 111% respectively. South Africa’s imports from Zimbabwe also increased in value by 686% between 2008 and 2009 periods while those from the United States of America decreased in value between 2008 and 2009 periods.

64

Figure 24: Competitiveness of suppliers to South Africa for essential oils of lemon imported in 2009.


65

Figure 24 illustrates competitiveness of suppliers to South Africa for essential oils of lemon imported in 2009. The figure further illustrates that Argentina was the biggest supplier of essential oils of lemon during the same period under review. The figure also illustrates that Germany and United States of America were the most competitive suppliers of essential oils of lemon with South Africa’s annual growth of imports from these countries being 100% respectively between 2005 and 2009 periods.

66

Figure 25: Market diversification of suppliers for essential oils of lemon imported by SA in 2009


67

Figure 25 indicates market diversification of suppliers for essential oils of lemon imported by South Africa in 2009. The figure also indicates that Argentina commanded the greatest market share of essential oils of lemon imported by South Africa during the period under review. The figure further indicates that if South Africa wants to diversify its markets of essential oils of lemon, potential import markets are available in United States of America with a market share of about 52% and in Germany with about 5% share.

68

Table 15: List of importing markets for essential oils of oranges exported by SA in 2009 Trade Indicators


2009, USD thousand

Share in South Africa's exports,

%

Exported quantity

2009 (tons)


Exported growth in value

between 2005-2009, %, p.a.


between 2005-2009, %, p.a.



imports, %

Tariff (estimated)


'World 1103 100 492 2242 5 -7 17 100

'United Kingdom 282 25.6 57 4947 281 37 18 5.6 '0

'China 258 23.4 153 1686 33 5.6 '20

'United States of America 175 15.9 94 1862 -13 -15 154 19.3 '0

'Canada 140 12.7 79 1772 -9 -10 3.1 '0

'Netherlands 52 4.7 38 1368 74 17 -73 2.8 '0

'Japan 37 3.4 17 2176 28 13.3 '0

'Zambia 28 2.5 7 4000 -28 -46 180 0 '0

'Zimbabwe 27 2.4 7 3857 -56 -61 200 0.1 '5

'Italy 26 2.4 16 1625 1.3 '0

'France 17 1.5 7 2429 -32 -39 -65 4.9 '0

'Israel 11 1 8 1375 -76 0.1 '10

'Kenya 11 1 3 3667 13 -21 0 '0

'Malawi 11 1 2 5500 -20 -20 0 '0

'Poland 11 1 4 2750 -22 0 0.1 '0

'Singapore 9 0.8 1 9000 -31 1.5 '0

'Sri Lanka 6 0.5 2 3000 13 0 -14 0 '15

'Germany 1 0.1 0 -50 9 '0

'Greece 1 0.1 0 0.1 '0


69

Table 15 shows the list of importing markets for essential oils of oranges exported by South Africa in 2009. The table further depicts that South Africa exported a total of 492 tons of essential oils of oranges to the world during the period under review. In world terms, the United Kingdom and China commanded the greatest import market share for essential oils of oranges from South Africa during the same period under examination. In 2009 South Africa’s exports of essential oils of oranges to the United Kingdom increased both in value and quantity at approximately 281% and 37% respectively. South Africa’s exports to the United Kingdom also increased in value by 18% between 2008 and 2009 periods while South Africa’s exports to China increased in value by 33% between 2008 and 2009 periods. It is also clear in the table that the United Kingdom imported more of essential oils of oranges from the world than from South Africa during the same period under review as the exported growth in value and quantity from the world between 2005 and 2009 periods and between 2008 and 2009 periods were less than what the United Kingdom imported from the rest of the world over the same periods under review.

70

Figure 26: Growth in demand for essential oils of oranges exported by South Africa in 2009


71

Figure 26 represents growth in demand for essential oils of oranges exported by South Africa in 2009. The figure further shows that the United States of America, Germany and France were the biggest import markets of essential oils of oranges exported by South Africa during the same period under examination. The figure also shows that South Africa’s exports of essential oils of oranges in United Kingdom were growing faster at about 100%, as compared to its exports to the Netherlands which was also growing faster at approximately 70%. The graph further shows that the United Kingdom and Netherlands were attractive, dynamic markets for essential oils of oranges from South Africa, with an annual growth in exports of 100% and 70% respectively.

72

Figure 27: Market diversification for essential oils of oranges exported by SA in 2009


73

Figure 27 depicts prospects for market diversification for essential oils of oranges exported by South Africa in 2009. The figure further depicts that the United States of America followed by Germany were the biggest import markets of essential oils of oranges from South Africa during the same period under review. The graph also depicts that if South Africa had to diversify its markets of essential oils of oranges, small attractive markets exist in Nigeria, Kenya, Sri-Lanka and Zimbabwe.

74

Table 16: List of supplying markets for essential oils of oranges imported by SA in 2009 Trade Indicators


2009, USD thousand

Share in South Africa's imports, %


(tons)


Imported growth in

value between

2005-2009, %, p.a.

Imported growth in quantity

between 2005-2009, %, p.a.

Imported growth in value between 2008-2009, %,

p.a.


exports, %

Tariff (estimated) applied by

South Africa

'World 580 100 98 5918 20 -7 1 100

'Australia 222 38.3 12 18500 1486 0 '0

'Zimbabwe 138 23.8 75 1840 104 81 712 0.1 '0

'Netherlands 85 14.7 6 14167 9 -36 2 2.8 '0

'Switzerland 61 10.5 0 -6 -46 2.1 '0

'United Kingdom 45 7.8 2 22500 38 -23 -84 6.3 '0

'Germany 10 1.7 1 10000 49 100 6.4 '0

'Italy 10 1.7 0 11 2.7 '0

'United States of America 6 1 1 6000 32 0 -14 28.3 '0

'Singapore 2 0.3 0 0.2 '0

'Israel 1 0.2 0 0 '0


75

Table 16 illustrates the list of supplying markets for essential oils of oranges imported by South Africa in 2009. The table further depicts that South Africa imported a total of 98 tons of essential oils of oranges from the world during the period under review. The reason for South Africa to import less essential oils of oranges (98 tons) was that South Africa was a net exporter of essential oils of oranges (492 tons) during the same period under scrutiny. In world terms, Australia and Zimbabwe commanded the greatest export market share of essential oils of oranges to South Africa during the period under scrutiny. In 2009 South Africa’s imports of essential oils of oranges from Zimbabwe increased both in value and quantity at approximately 104% and 81% per annum respectively. South Africa’s imports of essential oils of oranges from Zimbabwe also increased in value by 712% between 2008 and 2009 periods while those from Australia also increased in value by 1486% between 2008 and 2009 periods.

76

Figure 28: Competitiveness of suppliers for essential oils of oranges imported by South Africa in 2009


77

Figure 28 shows competitiveness of suppliers to South Africa for essential oils of oranges imported in 2009. The figure further shows that the United States of America was the biggest supplier of essential oils of oranges imported by South Africa during the same period under review. The figure also shows that Germany followed by United Kingdom were the most competitive suppliers of essential oils of oranges with annual growth in imports of about 48% and 50% respectively between 2005 and 2009 period.

78

Figure 29: Market diversification for essential oils of oranges imported by SA in 2009


79

Figure 29 indicates prospects for market diversification of suppliers for essential oils of oranges imported by South Africa in 2009. The figure further indicates that the United States followed by United Kingdom commanded the greatest market share for essential oils of oranges imported by South Africa during the period under review. The figure also indicates that if South Africa had to diversify its import markets of essential oils of oranges, potential markets are available in United Kingdom, Switzerland and Zimbabwe with an export market share of about 9%, 11% and 25% shares respectively.

Table 17: List of importing markets for essential oils of peppermint exported by South Africa in 2009


Trade Indicators


2009, USD thousand

Share in South Africa's exports, %


(tons)


Exported growth in value between 2005-2009, %,

p.a.

Exported growth in quantity between 2005-2009, %,

p.a.

Exported growth in value between

2008-2009, %, p.a.

Share of partner

countries in world

imports, %

Tariff (estimated)


'World 76 100 3 25333 14 8 25 100

'Zimbabwe 38 50 2 19000 4 15 -12 0 '5

'United Kingdom 20 26.3 0 186 12.4 '0

'France 16 21.1 0 3.3 '0

'Malawi 1 1.3 0 '0

'Belgium 4.1 '0

'Hong Kong, China 3 '0

Table 17 depicts the list of importing markets for essential oils of peppermint exported by South Africa in 2009. The table also depicts that Zimbabwe was the biggest import market for essential oils of peppermint from South Africa during the period under examination. The table also depicts that South Africa’s exports of essential oils of peppermint to Zimbabwe increased in both value and quantity at about 4% and 15% but the exports value between 2008 and 2009 decreased by 12%. Zimbabwe commanded 50% share in South Africa’s exports of essential oils of peppermint as compared to the United Kingdom’s share of 26.3% during the period under scrutiny.

80

81

Figure 30: Growth in demand for essential oils of peppermint exported by SA in 2009


82

Figure 30 illustrates growth in demand for essential oils of peppermint exported by South Africa in 2009. The figure further illustrates that there were no growth in terms of the world imports of peppermint from South Africa in the dynamic market over the same period. The figure also illustrates that the annual growth of South Africa’s exports of essential oils of peppermint to a declining market such as Zimbabwe were growing between 3.75% and 4.5%.

83

Figure 31: Prospects for market diversification for essential oils of peppermint exported by SA in 2009


84

Figure 31 shows prospects for market diversification for essential oils of peppermint exported by South Africa in 2009. The graph shows that United Kingdom, Germany and Singapore were the biggest import markets for essential oils of peppermint originating from by South Africa during the period under examination. The figure also shows that should South Africa want to diversify its markets of essential oils of peppermint, small and attractive markets exist in Zimbabwe.

Table 18: List of supplying markets for essential oils of peppermint imported by South Africa in 2009

Trade Indicators


2009, USD thousand

Share in South

Africa's imports, %

Imported quantity

2009 (tons)


Imported growth in

value between

2005-2009, %, p.a.


2005-2009, %, p.a.

Imported growth in

value between

2008-2009, %, p.a.


exports, %

Tariff (estimated) applied by South

Africa

'World 1308 100 29 45103 13 -5 70 100

'United States of America 885 67.7 14 63214 30 5 155 54.8 '0

'United Kingdom 344 26.3 10 34400 -4 -14 -6 5.2 '0

'India 37 2.8 3 12333 12 11 164 22.8 '0

'China 16 1.2 1 16000 9 0 45 0.3 '0

'Singapore 16 1.2 1 16000 8 '0

'Germany 8 0.6 0 4 -33 2.4 '0

'Australia 2 0.2 0 0.2 '0

'France 1 0.1 0 -14 2.4 '0

'Italy 1 0.1 0 0 '0

'Malawi 0 '0

'Zimbabwe '0


85

Table 18 indicates the list of supplying markets for essential oils of peppermint imported by South Africa in 2009. The table indicates that United States of America was the biggest exporter of essential oils of peppermint to South Africa followed by United Kingdom. The table also indicates that South Africa’s imports of essential oils of peppermint from United States of America grew at a rate greater than the average exports from the rest of the world (13% against 30%, -5% against 5%, and 70% against 155%).

86

87

Figure 32: Competitiveness of suppliers to South Africa for essential oils of peppermint imported in 2009


88

Figure 32 illustrates competitiveness of suppliers to South Africa for essential oils of peppermint imported in 2009. The figure further illustrates that United States of America was the biggest supplier of essential oils of peppermint imported by South Africa during the same period under review. The figure also illustrates that Germany followed by India and Germany were the most competitive suppliers of essential oils of peppermint during the period under scrutiny. The figure also illustrates that South Africa’s annual imports growth to the United States of America grew up by 30% between 2005 and 2009 period.

89

Figure 33: Prospects for diversification of suppliers for essential oils of peppermint imported by SA in 2009


90

Figure 33 shows prospects for market diversification for essential oils of peppermint imported by South Africa in 2009. The graph further shows that Germany was the biggest export market for essential oils of peppermint to South Africa followed by United Kingdom during the period under examination. The figure also shows that should South Africa want to diversify its markets of essential oils of peppermint, small and attractive markets exist in Singapore, Australia and India. During the same period, the figure further shows that United States of America commanded 70% share in South Africa’s imports of essential oils of peppermint.

91

Table 19: List of importing markets for essential oils of other mints exported by South Africa in 2009

Trade Indicators


2009, USD thousand


exports, %


(tons)



p.a.


between 2005-2009, %, p.a.


p.a.


imports, %

Tariff (estimated) faced by South

Africa

'World 9 100 0 -14 50 100

'Zimbabwe 9 100 0 45 80 0 '5

'Belgium 3.3 '0

'Brazil 6.9 '5.3

'Guatemala 2.1 '0

'Japan 6.4 '1.4

'Mexico 4.1 '5

'China 8.8 '15

'France 3.6 '0

'Germany 6.4 '0

'India 1.1 '20

'Spain 1.5 '0

'United Kingdom 6.5 '0

'United States of America 33.5 '0


92

Table 19 indicates the list of importing markets for essential oils of other mints exported by South Africa in 2009. The table further indicates that during the period under review, South Africa exported no essential oils of other mints to the world. In world terms, Zimbabwe commanded the greatest market share for essential oils of other mints from South Africa during the same period under examination. In 2009 South Africa’s exports of essential oils of other mints to Zimbabwe increased in value at approximately 45% and also increased in exports in value between 2005 and 2009 period. It is clear in the table that Zimbabwe’s exports in value was more than the world’s exports in value during the same period under review.

93

Figure 34: Growth in demand for essential oils of other mints exported by South Africa in 2009


94

Figure 34 illustrates growth in demand for essential oils of other mints exported by South Africa in 2009. The figure further illustrates that Zimbabwe’s growth in demand for essential oils of other mints from South Africa grew up by 45% in a dynamic market between 2005 and 2009 period. The figure also illustrates that in terms of annual growth of South Africa’s exports of essential oils of other mints in a declining market, there was no growth of exports to any country between 2005 and 2009 period.

95

Figure 35: Market diversification for essential oils of other mints exported by SA in 2009


96

Figure 35 depicts market diversification for essential oils of other mints exported by South Africa in 2009. The graph also depicts that United States of America commanded the greatest market share for exports of essential oils of other mints from South Africa during the period under examination. The figure further depicts that if South Africa had to diversify its markets of essential oils of other mints, small and attractive markets exist in India and Zimbabwe during the same period under scrutiny.

97

Figure 36: Competitiveness of suppliers to South Africa for essential oils of other mints imported in 2009


98

Figure 36 indicates competitiveness of suppliers to South Africa for essential oils of other mints imported in 2009. The bubble graph further indicates that Germany, India and United Kingdom were the three most competitive suppliers of essential oils of other mints to South Africa during the period under observation. The annual growth of South Africa’s imports of essential oils of other mints from Germany increased by 100% as compared to India with an annual growth of about 85% and United Kingdom with an annual growth of 70% between 2005 and 2009 period.

99

Figure 37: Market diversification of suppliers for essential oils of other mints imported by SA in 2009

Source: ITC Trade Ma

Figure 37 shows market diversification of suppliers for essential oils of other mints imported by South Africa in 2009. The figure further shows that United States of America was the biggest market for essential oils of other mints during the period under examination. The figure also shows that if South Africa had to diversify its suppliers of essential oils of other mints, potential supplying markets for the product the exist in India and Canada between 2005 and 2009 period.

11. THE ESSENTIAL OILS OF PEPPERMINT 11.1 Description of the herb peppermint Mentha x piperita L. is a sterile, perennial herb originating from a hybridization between watermint (Mentha aquatica), and spear mint (Mentha spicata), and therefore must be propagated vegetatively. The entire plant has a very characteristic sharp, mint odor, because of the presence of the volatile oil. This is an easy growing perennial herb, growing up to 1 meter high, with underground runners and a distinctive menthol fragrance.

11.1.1 Properties of peppermint Peppermint is a decongestant, cooling, fragrant and bitter herb that is anti-spasmodic, diaphoretic, digestive, antiseptic and slightly anesthetic. It contains a high amount of essential oil, which contains menthol, menthone, menthyl acetate and menthofuran.

11.1.2 Safety precautions and warnings Peppermint essential oil must be used in moderation and the menthol contained in the oil may cause sensitizing to some individuals skin. It can irritate the mucus membranes if the dosage is too high. If used in pregnancy, very small amounts should be used and not recommended for infants.

11.1.3 Production levels in South Africa Under irrigation and good management, peppermint will yield 20 to 25 tons of plant material per hectare per year, at an oil recovery rate of o.3 % or 60 to 75 kg essential oil per hectares. Dry land production will generally be less, but it will depend entirely on the quantity of rainfall and its frequency throughout the season.

100

11.1.4 Major production Areas in South Africa Peppermint can be grown in most parts of South Africa where rainfall of higher than 1000 mm per annum occurs with long periods of sunlight and cool night temperatures. The latter are needed for the correct balance of high quality oil production and it limits the constituent menthofuran, which is undesirable in the oil. There are indigenous species growing in South Africa in the temperature zones and these are indicators of where the crop can be grown successfully. The best areas are the escarpment of Mpumalanga, Gauteng, Eastern Free State, higher altitudes of Kwazulu Natal, and areas in the Eastern and Western Cape.

11.1.5 Stem, Leaves, and Flowers Peppermint is a summer growing perennial with upright, usually purplish, smooth stems growing to one meter in height. The lance shaped leaf margins are finely toothed, their surfaces smooth, both above and beneath, or very slightly hairy (hardly visible), on the principal veins and midrib on the underside. The whorled clusters of little reddish violet flowers are in the axils of the upper leaves, forming loose, interrupted spikes, and rarely bear seeds.

11.1.6 Essential part of peppermint The whole plant is cut at flowering stage for steam distillation. The oil is found on the undersides of the leaves.

11.1.7 Post harvest handling

• Sorting and Distillation The crop is steam distilled and the steam/oil vapor is condensed and separated. Condensing and separation equipment should be manufactured from stainless steel and a general processing hygiene followed to ensure no contaminants are present. The time for oil extraction varies, depending on the type of steam source, the herb weight, and the moisture content.

• Grading The main chemical constituent of peppermint oils is menthol; however, it also contains menthyl acetate and isovalerate, menthone, cineol, pinene, limonene and other constituents. The quality of the oil is determined by the correct combination of chemical constituents, especially menthol and menthone and the absence of menthofuran.

101

Once the oil is separated, the product is relatively stable for many months, provided it is stored out of direct sunlight and away from heat. The odor and taste is a good indication of the quality of the oil.

• Packaging and Storage Epoxy lined, fluorinated plastic and galvanized drums are used for bulk storage and transportation. Peppermint essential oil should be stored in a cool, dry area until it is used. Once opened, refrigeration and tightly closing the cap will prolong its shelf life.

• Marketing The market for essential oils in South Africa is divided into local buyers and international buyers. The local buyers include marketing agents and companies from chemical and pharmaceutical, as well as food and flavoring industries. The international buyers are divided into flavor and fragrance houses, cosmetics and personal health care, aromatherapy and food manufacturers who buy in large quantities. The major market in the world for essential oils exists in the United States, followed by Japan and Europe. However, production continues to be concentrated in Europe, with seven of the world’s largest essential oil processing firms. In the United States, the major users of essential oils are the soft drink companies.

11.1.8 The peppermint sale price Price is largely regulated by the world supply and demand. Peppermint is presently being produced in countries with low labor costs such as china and India. This can make it difficult for a South African farmer to compete, unless there is a fair degree of value adding applied. Organically grow mint oil is always in demand and will fetch better prices.

11.1.9 Essential Oils of Peppermint Industrial Utilization Peppermint essential oil is mainly used as flavoring in toothpaste, ice cream, confectionery, soft drinks, tobacco, chewing gum, and other varieties of foods. It can also be found in shampoos, soaps, balms and liniments. The oil has a cooling effect for fevers. Peppermint tea and tea blends are becoming more popular as natural food stuff. Peppermint tea is used for relief of palpitations of the heart and nausea.

102

103

11.1.10 Cosmetic Utilization The therapeutic peppermint value lies in its ability to relieve flatulence, bloating and colic, inhibit the growth of certain bacteria, and can assist in smoothing and relaxing muscles when inhaled or applied to the skin. It increases sweating, stimulates secretion of bile, assists in curing ulcers. Peppermint eases nervous headaches and is used for aid in cases of cholera and diarrhea. Peppermint is used to disguise the taste of unpalatable drugs, as it imparts its aromatic characteristics to whatever prescription it enters into. In aromatherapy the essential oil is used to stimulate hot and verve endings and increase blood flow.

Table 20: Role players in the South African Fragrance and flavor industry and essential oil trading Company Address Contact

Person Telephone Number

Email

Comhan Products (Pty) Ltd

Box 413066, Craig hall 2024

Nathalie Jelonek

+27 (0) 11 325 6090

[email protected]

Cranbrook Flavours

Po Box 1644, Edenvale 1610

011 398 6000 [email protected]

Craetive Flavors International (Pty)Ltd

Box 302, Strubens Valley 1735

Adri Stander

+27(0) 11 760 1830

[email protected]

Danlink Ingredients (Pty)Ltd

Box 3208, Cramerview 2060

Sambashni Govender

+27(0) 11 469 4508

[email protected]

Deli Spices (Pty)Ltd

Box 611, Eppindust 7475

Robin Haller

+27(0) 21 505 2000

[email protected]

Dunmustard Distributors

Box 1518, Westville 3630

Anthony Krijger

+27(0) 31 701 7734

[email protected]

Firmenich (Pty)Ltd

P/Bag X113, Halfway

Dody Leijenaar

+27(0) 11 653 0700

[email protected]

104

mailto:[email protected]







Company Address Contact Person

Telephone Email Number

House 1685 FlavourCraft (Pty) Ltd

Box 962, New Germany 3620

Ryan Ponquett

+27(0) 31 764 9760

[email protected]

Flavourome (Pty) Ltd

P/Bag X6, Kyalami 1684

David Wright

+27(0) 11 314 0219

[email protected]

Foodspec Co (Pty) Ltd

Box 1783, Pinegowrie 2123

Jenal Harduth

+27 (0) 11 793 1333

[email protected]

Fruition CC Box 505, Wellington 7654

Nick Schwerin

+27 (0) 21 873 6716

[email protected]

Frutarom South Africa (Pty) Ltd

Box 4449, Honeydew 2040

Darrell Gray

+27 (0) 11 794 1362

[email protected]

Givaudan South Africa (Pty) Ltd

Box 83027, South Hills 2136

Antoine Nourrain

+27 (0) 11 406 8700

[email protected]

Illovo Sugar Ltd

Post Office Sezela 4215

Charles Kruger

+27 (0) 39 975 8216

[email protected]

International Flavors & Fragrances (SA)(Pty) Ltd

Box 40, Isando 1600

Levi Thamage

+27 (0) 11 922 8800

[email protected]

Junnderee (Pty) Ltd

P/Bag X2025, Isando 1600

Chris Young

+27 (0) 11 974 7822

[email protected]

105












Letaba Citrus Processors (Pty) Ltd

Post Net Suite 100, P/Bag X 4019, Tzaneen, 0850

Carmen Sacco

+27 (0) 15 304 4000

[email protected]

McCollum & Associates SA (Pty) Ltd

Box 880, Morningside 2057

Peter Harrison

+27 (0) 11 234 8470

[email protected]

Mane South Africa (Pty) Ltd

Unit 1, Bertie Park, 12 Bertie Avenue, Eppindust

Mark Mulholland

+27 (0) 21 534 4422

[email protected]

McCormick South Africa (Pty) Ltd

P/Bag X 64, Halfway House 1683

Mike Palmer

+27 (0) 11 690 0311

[email protected]

Nicola-J Flavours & Fragrances (Pty) Ltd

Box 6837, Halfway House 1685

Jason Vlantis

+27 (0) 11 315 6582

[email protected]

Petrow Food Ingredients (Pty) Ltd

Box 11172, Randhart 1457

Craig Taylor

+27 (0) 11 613 2702

[email protected]

Savannah Fine Chemicals (Pty) Ltd

Box 75864, Gardenview 2047

Colleen Maroun

+27 (0) 11 856 4500

[email protected]

106









Savoury Food Industries

Box 43028, Industrial, 2042

Harry Meyer

+27 (0) 11 309 1606

[email protected]

Sensarome (Pty) Ltd

P/Bag X 6, Kyalami, 1684

Themba Nghalaluma

+27 (0) 11 805 8294

[email protected]

Sensetek CC Box 2598, Bedfordview 2008

Mike Capon +27 (0) 11 608 4944

[email protected]

Sensient Colors South Africa (Pty) Ltd

Suite 173, P/Bag X 7, Northriding 2162

Dershana Jackison

+27 (0) 11 462 7150

[email protected]

Sharon Bolel Chemical Marketing

Box 693, Edenvale 1610

Sharon Bolel

+27 (0) 11 454 5400

[email protected]

SK Chemtrade Services (Pty) Ltd

Box 5101, Meadowdale 1612

Vanessa Salt

+27 (0) 11 974 1124

[email protected]

Sunspray Food Ingredients (Pty) Ltd

Box 43057, Industrial 2042

Rene Cross +27 (0) 11 473 6811

[email protected]

Symrise (Pty) Ltd

Box 143, I sando 1600

Rudy McLean

+27 (0) 11 921 5600

[email protected]

Unique Flavors

Box 9583, Centurion

Johan Smith

+27 (0) 12 644 0334

[email protected]

107












0048 Val-U-Flavours (Pty) Ltd

Box 10053, Belhar 7507

Rurik McKaiser

+27 (0) 21 981 7892

[email protected]

Von Holy Consulting CC

Box 4449, Edenvale 1610

Corene Von Holy

+27 (0) 83 267 6004

[email protected]

Afriplex Flavours & Fragrances (Pty) Ltd

Box 3186, Paarl 7620

Grant Momple

+27 (0) 21 872 4976

[email protected]

Agrana Fruit South Africa (Pty) Ltd

Box 143, Bergvliet 7864

Philippe Gomez

+27 (0) 21 705 0210

[email protected]

Bidfood Technologies (Pty) Ltd

Box 37200, Chempet, 7442

John Morris

+27 (0) 21 527 5020

[email protected]

Cargill Flavor Systems (RSA) (Pty) Ltd

Box 354, Table View 7439

Nicole Lombard

+27 (0) 21 556 1512

[email protected]

Carst & Walker (Pty) Ltd

Box 87710, Houghton 2041

Gloria Ford +27 (0) 11 489 3631

[email protected]

108










Chemimpo SA (Pty) Ltd

Box 1378, Randburg 2125

Dawie S Maartens

+27 (0) 11 293 2000

[email protected]

Claman (Pty) Ltd

Box 70667, Bryanston 2021

Clarissa Heyman

+27 (0) 11 704 5289

[email protected]

Clive Teubes (Pty) Ltd

Box 4919, Randburg 2125

Ron Allwright

+27 (0) 11 793 1207

[email protected]

Coca Cola South Africa (Pty) Ltd

Box 9999, Johannesburg 2000

Karen Vokes

+27 (0) 11 644 0666

[email protected]

Soil 27 Musgrave Avenue, Durban, 4001

Nikki or Grant

+27 (0) 31 201 2778

[email protected] [email protected]

Source: South African Association of the Flavour & Fragrance Industry (SAAFFI)

109






110

Table 21: Sector Organizations and Research Institutions Involved in the Essential Oils Industry. Organization Role

South African Essential Oils Producer Association (SAEOPA)

Its role is to provide knowledge for current and potential oil producers with information ranging from species selection, quality control etc.

Small Enterprise Development Agency (SEDA) SEDA has been involved in setting up essential oil business incubation, which provide technical assistance in the Eastern Cape & North West Province

The Council for Scientific & Industrial Research (CSIR)

CSIR is active in developing production techniques and has developed various steam distillation techniques. It also provides technical consulting services.

Agricultural Research Council (ARC) It introduced essential oil crops into selected rural communities and it also provides mentorship support to selected farmers of essential oils.

Department of Agriculture and Academic Institutions in South Africa

Conduct research and development of manuals to help growers.

Source: South African Essential Oils Producers Association (SAEOPA)

12. ACKNOWLEDGEMENTS The following organizations are acknowledged: Agricultural Statistics: Department of Agriculture, Forestry and Fisheries Tel: (012) 319 8453 Fax: (012) 319 8031 Website: www.daff.gov.za South African Essential Oils Producers Association (SAEOPA) Karen Swanepoel University of Zululand Tel: 035 902 6359/ 082 785 8700 Fax: 035 902 6428 Website: http://safarmer.net/SAEOPA South African Association of the Flavour & Fragrance Industry (SAAFFI) Tel: +27 (0) 11 447 2757 Fax: 0866 203 723 E-mail: [email protected] Website: www.saaffi.co.za ITC Market Access Map Website: http://www.macmap.org/SouthAfrica ITC Trade Map Website: http://www.trademap.org. Disclaimer: This document and its contents have been compiled by the Directorate: Marketing of the Department of Agriculture, Forestry and Fisheries for the purpose of detailing essential oils value chain. Anyone who uses the information as contained in this document does so at his/her own risk. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to essential oils market unless otherwise stated. The Department of Agriculture, Forestry and Fisheries, therefore accepts no liability that can be incurred resulting from the use of this information.

111

http://www.daff.gov.za/

http://safarmer.net/SAEOPA


http://www.macmap.org/SouthAfrica

http://www.trademap.org/

a profile of the south african essential oils market … · 1. description of the essential oils’...

Documents