Botanical World News
Fall 2006
We have seen many changes within the raw Botanical and Spice markets over this past year. For example, we are not seeing the product shortages that we experienced over the previous year, the method of collecting raw material is significantly different and pricing has been on a continuous rise.
The price increases across the board have mainly been caused by the global increase in oil costs. In addition, the rising expenses of collecting raw material, manufacturing and freight charges have also been contributing factors.
The collection of Botanical raw materials have also been changing over the last 5 years. Traditionally, large dealers from the country of origin collect material throughout the year and then ship to their customers as ordres are placed. However, currently the dealers are processing their ordres at harvest time and collecting only what is needed to meet their pending order requirements. This can cause a shortage of material towards the end of the raw material cycle. As a preventative measure, we encourage clients to look into annual contracts, as material supply cannot always be guaranteed.
Market Report
Cascara Sagrada
The collections this year were down due to the amount of permits being issued to collect the Cascara from the private forests in the Northwest Oregon and Washington States, which have been the traditional collecting areas. Collectors have laso had problems getting insurance to go onto the land (all private forests require insurance for fire and injury liability). With the fuel costs and access difficulties to Cascara areas, we will certainly see prices move up, and product shortages are likely.
Cayenne
Prices from India have doubled ove rthe last year and are expected to increase through early 2007. India had a good crop, but here is a new growing internal demand from India's expanding middle class for Chilies, which is having and effect of it's availability. The usual export of 30,000 metric tons has been taken out by Indian domestic market, which uses in excess of 1 million tons a year. The other major source is China, which is having the same internal demands as India. Because of this, we can expect continued pressure on the prices for Chilies within the next few years.
Fennel
The major source of Fennel used in the United States is from Egypt. We have seen a continued increase in demand in the US for good quality Fennel, and Eqypt has been slow to react to this new extra demand. In the first 6 months of 2006, the US imprted 1,981 MT in comparison to 1,280 MT in 2005 during the same period (1,575 MT in 2004). The other source is India, and similar to the Chilies, internal demand has increased, limiting the amount of Fennel available for export. You can expect pricing to continue to move up through 2007.
Ginger
Prices have begun to decline in both India's Cochin region and in China. We saw large price increases in 2005, and in response farmers from both Countries planted extra crops to meet the demand. A lot of Ginger is now going the fresh Ginger market, instead of the historical dry Ginger export market. There have been many worldwide changes in the food that we eat today, creating new markets for traditional products. We expect Ginger to stay competitive for the 2007 crops.
Hawthorne Berries
The crop from Eastern Europe has been collected and we are likely to see some shortages as an outcome. there are early indications that the crop in 20% below last year, and as a result prices have already moved up in origing. Shortages are a high possibility in the second quarter of 2007. We strongly suggest looking at your annual needs and taking coverage through the new crop in July/August 2007.
Panax Ginseng
Supplies are short again this year as the Chinese exporters are having a difficult time finding Panax Ginseng that meets FDA guidelines. Demand from the US has continuted to grow with the introduction of many new retail prodcuts. The new crop has only begun to be harvested in the second half of September, and prices are up 50% from last year's export price. We expect the market to be very tight again through 2007.
Psyllium Husk
The market in India has been on fire for the last 5 months. The first indications in March 2006 were that we would see an excellent crop, 30% above normal. However, the record rains in Northern India reduced that number to nearly 50% of normal crop. Most buyers were caught by surprise with little coverage, and prices have already moved up nearly 100% since last year. We will not see new crop until April 2007, and we are likely to see the prices to continue to rise. Because the crop was so small, we have seen older crops being offered, and the prices are still high. As the old expression goes, "you get what you pay for".
Valerian Root
Poland's new crop has been coming in during late September/ early October, and the material we have seen looks good. We are expecting about 10% cost increase over last year, due to the cost of fuel and other higher expenses (i.e. trucking and shipping). The other origins, including Bulgaria, are expecting a little smaller crop. Demand in the US has been a little down in the last year, and the majority of the Valerian is used in Germany.