News

Coriander Seed Market 2020

The RUSSIAN Coriander Seed Oil market has been flat for the past 18 months due to a series of historical events along with some market contraction. To better understand what happens this season, which commences in July 2020, we wanted to explain the history so our clients can make informed choices about their purchasing strategy. As unlike with many other essential oils, we expect more of a shortage of raw materials this term rather than an over supply. This is how we got to today’s thoughts.

2015/16
Strong market demand, greater than in previous year averages pushed seed prices up but it didn’t detract buyers from taking material no matter what the price.
Average oil export prices are $70.00 /kilo EXW/FOB.

2016/17
Demand is still strong but drops back a little to pre-2015 market averages. Seed prices slowly start to fall on the premise of a small over supply.
Average oil export prices are $48.00 /kilo EXW/FOB

2017/18
Over supply of seeds result in cheaper seed availability and oil prices drop significantly. Market size contracts a little but demand is firm for ‘cheaper oil’. Some farmers start to plant other crops.
Average oil export prices are $38.00 /kilo EXW/FOB

2018/19
Seed prices remain low but the pipelines for oil demand are full as overall market size falls in several sectors. Oil prices remain low and demand is weak. Most farmers have now switched to other crops.
Average oil export prices are $40.00 /kilo EXW/FOB

2019/20
Smaller growing areas means less seeds harvested, increasing prices of seeds significantly without the pressure of market demand for new oil as surplus stocks continue to remain in place.
Average oil export prices are $42.00 /kilo EXW/FOB

2020/21
The forecast is for the crop size to be similar to last year but surplus oil supplies are likely to run dry. There will be a greater demand on new oil production and with seed prices set to rise further, oil prices are likely to increase.

Despite a contraction in demand in recent years the volume of oil stocks in the market are now thought to be much lower and will be exhausted over the course of the next season

There are many variables to consider including future demands, other growing regions and exchange rates but it is fair to say that oil prices today remain low when considering the seed prices. If, as expected, oil demand returns later in 2020 we will should see a more realistic and fairer price for the oil based on seed costs and supply. Recent history will suggest that even when removing the exchange rate variable, based on costs alone, export oil prices should be closer to $60 /kilo FOB. Since mid-March the crude oil trade war has devalued the Russian Ruble by 30% so this will help offset the impact back under $50 /kilo but the real factors are hidden behind the exchange rates for now. Don’t be surprised to see seed prices continue to rise and exchange rates dependant, export prices quickly return to +$60.00 /kilo.

Seed price are usually in-line with oil prices but today’s gap between the higher seed price and the low oil prices is condition which is unsustainable. Today’s export prices are being aided by a collapse in the value of the Russian Ruble.