Demand for Tea Tree Oil has been going crazy. Since January, sellers have been deluged by requests for 100% pure Australian Tea Tree Oil. It is most likely that all stocks of Tea Tree Oil are completed sold or at least fully committed
The demand surged when coronavirus hit China. The greatest demand has been seen from China, Taiwan and Hong Kong. However, demand is also considerable in Indonesia and Malaysia.
Although the US market was complacent about coronavirus initially, US manufacturers’ demand increased rapidly in March with most buyers bringing forward orders and placing additional orders for the new harvest year.
This dramatic increase contrasted to demand in late 2019 for additional Tea Tree Oil as it had been steady to slightly soft. The Australian Tea Tree industry started having concerns about the state of the market. The dramatically increased global demand for oil in 2017 and 2018 stimulated additional plantings; these were beginning to come online with the 2019 harvest.
Coronavirus has changed market mentality. Previously, much of the Asian market was driven by price, however, that mindset has now changed. With lives at risk, quality, traceability and Australian provenance are critical to their Tea Tree Oil demand. Even once the coronavirus threat dissipates, we expect/hope this mentality to (largely) remain.
The 2020 harvest has started. Production of a natural resource like Tea Tree Oil is hard to predict, but ATTIA, the Australian Tea Tree Industry Association, is expecting up to 900T for this 2020 harvest. At this volume, we will definitely be up from last year’s drought-affected production of around 650T, an exceptionally low result. Production from the 2018 harvest was approximately 1000T, so we will roughly achieve this result for this year’s total production. By the end of this harvest season, supply will be back to market expectations.
Dee-Ann Prather – President, EOPAA.