The first records of essential oils come from ancient India, Persia and Egypt. Both Greece and Rome conducted extensive trade in odoriferous oils with countries of the Orient (referring to erstwhile countries of Asia). The much-prized spices of India, China and the Indies served as the impetus for the advent of European traders to India. By the middle of the 18th century about 100 essential oils were introduced in Europe. Knowledge about their chemistry was added in the 1800s and 1900s. This led to their usage in foodstuffs, beverages and perfumes exceeding their use in medicine. These oils and their products have undergone various degrees of processing, extraction and alteration over the centuries.

Thus international trade in essential oils was one of the oldest known to history. The widespread use of aromatic plant products by consumers around the world and increasing international trade have been accompanied by attempts to identify new species of potential interest, to bring them into cultivation from the wild and to introduce them to distant locations away from their places of origin.

Aromatic substances of natural origin currently used by the pharmaceutical, perfumery, cosmetic and food industries are those derived from plants which have been cultivated for a long time and yet others are obtained from species which grow abundantly in the wild. Today the growing demand in industrialized countries for natural products in place of synthetic compounds has created a niche market for essential oils. The development of the essential oil industry is therefore important to many developing countries which have rich resources of raw materials or the climatic conditions for the initiation of crop-wise cultivation programmes. Though a lot of research has gone into synthetic substitutes for essential oils, the demand for natural oils has not declined. Essential oils are further processed or rectified to add value.

Based on the commercial value of produce, it has been estimated that developing countries and Eastern Europe together account for approximately two-thirds of the total world production of volatile oils. Among developing countries, the largest producers are China, India, Brazil, Morocco, Egypt, Indonesia and Turkey, these seven countries accounting for 85% of total production.

According to United Nations COMTRADE database, global imports of essential oils stood at US $2 billion in 2005. This increased by an average of 8% between 2000 and 2005 with no corresponding increase in volume. The top 10 importing countries in 2005 as listed by COMTRADE is given in Table 3.2. The fastest growing markets based on import spending between 2000 and 2005 included Vietnam (14% growth per annum), Poland (35%), Nigeria (16%), Turkey (25%), South Africa (14%), Indonesia (14%), Saudi Arabia (14%), India (19%), Spain (13%), Singapore (35%), Switzerland (14%) and Japan (13%).

 

Table 3.2 Top 10 essential oil importing countries

S.No.	Country	Essential Oil Import Value($ million)
1	USA	391
2	France	199
3	UK	175
4	Japan	152
5	Germany	117
6	Switzerland	103
7	Ireland	75
8	China	65
9	Singapore	61
10	Spain	61

Source: COMTRADE database.

The world trade in essential oils and their products is thus vast and oils of major importance such as sandalwood, peppermint, lemongrass, patchouli, palmarosa, vetiver, geranium, clove, citronella and aniseed occupy a prominent position in the world market.

India with its wide agroclimatic zones is one of the few countries in the world with the exact requirements for the cultivation of scores of essential oil-bearing plants. There has been a spiralling growth in the production of essential oils making it an emerging agro-based industry in the country. Currently 30% of the fine chemicals used in perfumes and flavours come from essential oils. The estimated production of perfumery raw materials in India is around 5000 MT per annum valued at Rs 400 crores. About 3800 MT per annum valued at Rs. 100 crores is the total consumption of perfumery raw material in India. Out of this, the share of food, dental and pharmaceutical industries is 700 MT, with the rest being used for perfumery.

Essential oils currently produced in India are citronella oil, lemongrass, basil, mint, sandalwood, palmarosa, eucalyptus, cedar wood, vetiver and geranium. Rose oil, lavender, davana, oil of khus and ginger grass are produced in small quantities. Peppermint, spearmint and other mint oils constitute 68% of the total volume of production of essential oils in the country, with basil, citronella, eucalyptus, lemongrass, palmarosa, sandalwood and vetiver oils constituting the rest. Approximately 90% of the present requirement of essential oils in the country is met by indigenous production and 10% from imports. In 1950 our essential oil production was hardly 75–80 tonnes and now it has risen to 8,000 tonnes.

Within India the demand for essential oils is from consumer industry products that may be grouped under fragrance, flavours and aromatic chemicals. The annual growth rate of the pharmaceutical industry in terms of volume and value of aromatic chemicals consumed is 11% to 13%. Flavours, i.e., usage by processed food industry, particularly ice creams and confectionary items, is rapidly expanding. Fragrances used in toiletries and personal care products are an important sector with volume-wise use of essential oils in toiletries constituting 90% of all these products. The requirement of essential oils by consumer industries under flavour, fragrance and aroma chemicals are 60%, 20% and 20%, respectively.

India is the world leader in the production of mint oil with 5,000 tonnes of menthol valued at Rs 100 crores being produced annually. Around 40,000 hectares are under mint cultivation mainly in Uttar Pradesh, Punjab and Haryana, and to some extent in Bihar and Madhya Pradesh. Similarly citronella oil which we used to import earlier is now produced to the tune of 500 tonnes per annum. The export of essential oils during the year 1991–1992 has been 53.6 crores as against 40 crores during the year 1990–1991 thereby registering an increase of 37% over the previous year. According to an estimate of the Association of Essential Oil Manufacturers of India, with growth in export value of essential oils form Rs 50 crores in 1991–1992 to Rs 125 crores in 1995–1996, India ranks 14th in the world export trade.

Some important essential oils exported from India are ginger, sandalwood, lemongrass, jasmine, tuberose concentrate, cedarwood, clove, eucalyptus, palmarosa, patchouli, davana, coriander, dill, spearmint and rose. The major importers of essential oil from India are the United States, France, UK, Netherlands, former USSR, UAE, Saudi Arabia, Spain, Morocco, Germany, Australia, Korea, Taiwan and Pakistan.

Some of the oils produced in excess of their domestic demand are exported while a few like lavender, patchouli, clove, nutmeg, geranium, ylang ylang and rose oil are imported. Cultivation of these essential oil-bearing plants has started in India. The consumption of basil, sandalwood, cumin, dill and juniper oils are fully met out of local production.

In view of the burgeoning growth of the processed food, herbal formulations and cosmetics industry the demand prospects of essential oil industry is expected to grow substantially in the coming years.