Beautiful aroma hiding volatile market supply situation.
The price of lemongrass is hitting new highs this month, as demand of good quality oil outstrips supply. This year’s problem is part COVID and part COVID-related supply chain (shipping) issues but is still actually an issue that stemmed from the BASF fire in 2017. How can a grass that grows so easily be subject to such price and availability fluctuations?
After the tragic accident at BASF, the global demand for citral was moved from synthetic to natural sources such as Litsea Cubeba and Lemongrass. This resulted in huge price rises through 2018 and start of 2019. This spurred governments to encourage farmers to plant lemongrass as it was a high value material.
Image: Our supplier partners Lemongrass fields
The price of lemongrass is hitting new highs this month, as demand of good quality oil outstrips supply. This year’s problem is part COVID and part COVID-related supply chain (shipping) issues but is still actually an issue that stemmed from the BASF fire in 2017. How can a grass that grows so easily be subject to such price and availability fluctuations?
After the tragic accident at BASF, the global demand for citral was moved from synthetic to natural sources such as Litsea Cubeba and Lemongrass. This resulted in huge price rises through 2018 and start of 2019. This spurred governments to encourage farmers to plant lemongrass as it was a high value material.
So as the BASF Citral plant resumed production, most synthetic users left the natural suppliers, which had seen a dramatic expansion in its supply capability. End users saw the price drop significantly during 2019 and continued into 2020 as farmers were left with unsold volumes. Fed up with having inventory, farmers deserted lemongrass cultivation as fast as they moved in, which saw the price start to creep back up during the end of 2020.
This summer, the weather in the main production areas of India are wetter than usual. Any farmer who tried to cut wet lemongrass would lose yield, so prices once again increased. Seeing the price rise has encouraged newer farms to harvest early when the crop is not mature enough. When Lemongrass is harvested before 100 days, the essential oil has a different profile. One example of this can be seen in the drop in citral concentration from our normal 68-75%, to 65-68% when harvested prematurely.
Image: Lemongrass field distillation units
Khush Ingredients supplies Lemongrass, with UK and EU REACH registration. We offer Organic, Conventional Flexuosus and Citratus.
As a field distilled oil with typically 70% citral in, it is easy to see how Lemongrass can be ‘extended’ using synthetic citral to earn the farmer more money. Beware of 75 to 80% levels of citral, particularly this year where natural levels are between 65 and 68%.
Khush works with the largest producers, who personally visit trusted farmers during the main season’s field distillation, ensuring grass is ready with regular checking of naturalness through C14 tests. Carbon-14 dating is a method which compares the proportion of the naturally occurring carbon-14 isotope with carbon-12. Our main product, Cymbopogon flexuosus, is bought at main harvest time and is checked by Khush Ingredients prior to import, so our customers can be assured of the provenance of the material in uncertain times.
We are advising our customers to cover themselves with their needs until May 2022, when if we see better growing (and an improved COVID situation) we can see a price correction. Maybe not to 2019/20 levels as those new farmers will not be easily tempted back to cultivation in the near future.
After the monsoons have passed, the price of lemongrass will be a little off peak, so good material will be available again towards the end of November in Europe.
Sample Requests
We are receiving this year’s samples in the coming weeks, so contact us at samplerequest@khushing.com to experience our range of organic and conventional lemongrass oils.