Monday, August 1, 2011

Essential oil business opportunities in Indonesia

As one of the biodiversity central, Indonesia has the opportunities to produces 40 kinds of essential oils from 80 species that are traded in world business. Of these, 13 species have entered the world markets that is patchouli, lemongrass, cloves, ginger, nutmeg, pepper, cinnamon, sandalwood, jasmine, vetiver, ylang, eucalyptus, and cubeb.
Most of the them produced by the farmers is exported to the market share of 64% patchouli, 67% ylang, 26% vetiver, 12% lemongrass, 72% nutmeg, 63% cloves. 0.4% ginger, and 0.9% pepper oil of world exports. Essential oils export destination for Indonesia, among others, the United States (23%), Britain (19%), Singapore (18%), India (8%), Spain (8%), France (6%), China (3% ), Switzerland (3%), Japan (2%), and other countries (8%). Although the market share of some of these commodities are individually relatively high, the total share of Indonesia in the essential oils international market is only about 2.6%. In any national economy, these products at 2001-2003 period has only a small portion, classified into commodities "plantation", the role of an average 0.01% of total export value of commodities. In 2004, essential oils export value reached U.S. $ 47.2 million, but this country also imported this commodity worth U.S. $ 12.26 million and their processed products (derivatives, isolates, and formulas) U.S. $ 117.20 million. If the value of imports is taken into account, so the Indonesia's trade balance for these commodities became negative. Actually, some of them can be produced domestically, such as peppermint oil (Mentha arvensis) and anise oil (Clausena anisata).
On 18-20 September 2006, in Solo has held the National Conference with the theme Towards SMEs of Essential Oils with Highly Competitive. The conference has identified 32 types that have the potential to be developed, among which there are seven new types which can be exploited commercially, ie anise oil, peppermint oil (cornmint oil), basil (Reunion type basil oil), fragrant lemongrass (East Indian Type), kitchen lemongrass (West Indian Type), jerangau (Calamus oil), and bangle. Various agreements have also been reached to develop these products in this country in order to provide optimum benefit and proportionate for all national stakeholders of this commodity.

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