Market report - 2008
Export of Rosewood Oil in 2008 was about 16% lower then in the previous year, totaling 21 tons.This was widely expected, because the 2007 production was exeptionaly high. For the first time the organic Rosewood Oil was responssible for more then 50% of the total production, confirming the trend of the last years. The first half of the year was marked by a strong valuation of the Real against the Dollar and because of it and the rising costs, the FOB price soared well above the US$100.00/kilo mark. After the ouburst of the international crisis in september 2008 the US$Dollar reversed the trend and valuated against the Real, but the price of Rosewood Oil remained unchanged.
In 2007 we introduced to the market the first Rosewood Oil made out of leaves and green branches. Last year we were able to increase the quantity to 3 drums and certainly hope to be able to produce 5 or 6 drums in 2009. The cost of such oil is 50%to 60% higher then the FOB of regular Organic Rosewood Oil, but despite the higher cost many customers showed interest. As Brazilian environmental authorities are tightening the controls over the activity and are stimulating the increase of managed planted areas, the quantity of oil produceds from leaves and branches tends to rise.We believe that this will guarantee the future of the Rosewood Oil production and that oil from leaves and green branches will be a hot product in the years to come.
We expect the production in 2009 to remain stable at the levels of last year and certainly hope that the price will remain stable
2008 was another bad year for the export of Copaiba Balsam, while the domestic market remained stable. At the end of the year the FOB price was about US$10.00/kilo, much lower then the previous year, but even so only sporadic small deals were possible. We expect the price to drop even more in 2009 which might improve the business.
The 2008 crop was so small that we preferd to stay out of this business.
Ilko Mintschev Minev