Over the last five years, we’ve observed multiple widespread shifts in the perception and purchasing habits behind essential oils within the US.
In the years preceding COVID, the total annual import of essential oils into the US averaged around 113,000 MT (per USDA). Purchases began to increase near the midpoint of 2020, as the pandemic’s severity ramped up around the world, forcing many farms and distilleries to cease production. Combined with the increased demand for products such as hand soap, sanitizer, and other cleaning solutions, the global essential oils market experienced a period of unprecedented growth.
This growth continued into 2021, with essential oil imports reaching their peak amidst the height of the pandemic. Demand was increasing month after month, compounded by the constant uncertainty surrounding COVID-19 and its impact on regional production operations. As such, many businesses stockpiled years’ worth of supply, safeguarding themselves against potential shortages or supply chain issues. This practice drove import volumes even higher, and the USDA estimates the total quantity of essential oils imported into the US during 2021 is just under 130,000 MT.
Since then, the pandemic has gone into remission in most regions, and essential oil markets have cooled to their normal levels. However, the intense stockpiling habits and ramped up production of the pandemic has had a reverberating effect on many essential oil producers throughout the world.
Between June of 2022 and 2023, we’ve observed a sizeable decline in the volume of essential oil imports to the US. Some products, such as Orange Oil and Lemon Oil, have experienced a much larger decline than most. Other products, such as Lavender Oil and Lavandin Oil, have had their total production areas significantly reduced at source, which will likely have a major impact on the total quantity of material available for distillation in the coming seasons.
All of this is to say that we expect 2024 to be a period of rebalancing for essential oil imports. Much like importers, farmers are constantly balancing their positions on various products throughout the ever-changing landscape of the essential oils market. When overall production of certain products changes, so too does global demand for those products.
As long-time experts of both global sourcing strategies and global supply chain management, Berjé is uniquely positioned to continue providing our customers with reliable volumes of high-quality essential oils, even amidst widespread market rebalancing.
