Reports continue to advise of a major shortage of Eucalyptus Oil. Besides the two months of continuous rain in the growing regions, a major tax reform policy has hampered payment to the farmers. This has resulted in higher prices. No relief is immediately expected as demand stays firm but we continue to monitor the situation.
We have reports that state demand for both has increased. With limited availability prices continue to be firm. We have also received a report that advised that rains in certain growing regions in Yunnan are currently hampering collection, adding more pressure on prices. Sentiment is that pricing will not ease this summer.
No real relief here. Reports continue to state that oil is limited due to conditions in the main growing region of Yunnan.
We have received a report that a major Chinese trading company has secured the majority of oil produced during December and January. This company has been releasing limited amounts of Eucalyptus every month, keeping prices high. Both frost damage and agricultural labor currently being devoted to food crops add to the expectation that the market will be firm for the foreseeable future.
Pricing on both products remains firm as it is still the dry season in Southern China. The diminished harvest caused by this year’s frost is worsening the limited availability that is common to April. May rains may help but prices will still likely stay firm until new oil is available in July.
Quality issues with Eucalyptus samples are becoming more common, possibly due to the issues caused by heavy rains during the summer months. With reportedly strong demand and little carryover, it’s possible that producers rushed production to get product to market more quickly. With new Oil expected to enter the market in December, we expect that pressures currently pushing up prices will dissipate.