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Jojoba Oil Producers Find Gold in German and Taiwan Markets
By Markus Frimmersdorf and Chiou Mey Perng
You can't grow Simmondsia
chinensis just anywhere. And production of the jojoba plant
in the United States is limited to the arid Southwest. Because of
the jojoba plant's
finicky climatic demands, U.S. producers find themselves in an
enviable position. They're
an exclusive source for many nonproducing countries where
consumers value the emollient qualities of the oil (actually a
liquid wax ester) for skin and hair care.
Jojoba is a relatively new crop, cultivated in the United States since the late 1970s. Before that, jojoba beans were harvested from wild plants. Although they've come a long way, owners of jojoba plantations are still perfecting the cultivation skills required for stable quality and quantity.
Efforts to stabilize quantities are hampered by jojoba's reproduction cycle, which alternates a bumper crop with a light crop and needs three to five years to produce its first marketable crop.
Costs to establish and maintain a plantation are astronomical. Investors who establish new plantations when supplies are tight and prices high may be forced out of business when prices fall. Also, weather patterns (El Niño this year) can do a number on the U.S. crop.
Though a world apart in more than market volume, the German and Taiwan markets--where U.S. exports top the competition--have similarities that oilseed exporters should note. Both markets are without domestic suppliers. They import crude and refined oil for domestic cosmetic uses and--here's the kicker--to process further for re-export.
Germany Buys More Crude
In 1996, at just over 200,000 kilograms, U.S. exports of crude jojoba oil outweighed refined exports to Germany by five times. Germany imports the oil for its cosmetics industry, but also processes crude oil into refined oil for re-export or trans-shipment--with prices consistently higher than their import prices.
Germany mainly exports crude jojoba to France, the Netherlands, Italy, Norway and the Czech Republic; refined oil is exported to Switzerland, France, Spain and Austria.
The German import market must deal with erratic supplies that can force dramatic price increases. Oil supplies have varied as much as 135 percent from one year to the next.
The United States is the
dominant supplier of jojoba oil to the German market with import
shares between 65 and 84 percent in recent years. Sales of jojoba
depend on the harvest. The demand for the product is constant and
increasing as new uses are found for the oil.
Import prices per kilogram range from $5 for crude to $10 for refined. To maximize profits in this market, industry experts recommend a threefold strategy for the jojoba exporters selling to the German market:
German Contacts for Jojoba Oil
These associations can establish contacts with German processors or sales companies:
German Association of Cosmetics, Importers, Producers and
Wholesalers
Talstrasse 3
40822 Mettmann, Germany
Tel.: (49-2104) 24-530
Fax: (49-2104) 24-583
German Association of Producers and Wholesalers of
Pharmaceuticals, Drugs and Cosmetics
L11, 20-22
68161 Mannheim, Germany
Tel.: (49-621) 129-4330
Fax: (49-621) 152-466
German Producer Association of Cosmetics and Washing Agents
Karlstr. 21
60329 Frankfurt/Main, Germany
Tel. (49-69) 2556-1333
Fax: (49-69) 237-631
Taiwan Demand Jumped
in 1995
On the other side of the world, Taiwan uses jojoba oil in the cosmetics industry, beauty salons and massage outlets. U.S. exports to Taiwan jumped from an average of 2,222 kilograms during 1992-1994, to above 5,000 kilograms in 1995. Prices in 1996 averaged just over $13 per kilogram.
The doubled volume came about as the number of beauty salons and oil massage chains increased and a new cosmetics industry began.
About 45 percent of the locally produced cosmetics are exported to Southeast Asian countries or mainland China. Local cosmetic production is expected to increase, depending on the economic situation in Pacific Rim countries. But minimally, jojoba consumption is expected to increase 2 percent per year through 2002.
Jojoba Oil Importers in Taiwan
Jojoba oil is distributed directly to cosmetic manufacturers or beauty salons and oil massage stations from importers. Importers include:
Universtar Orthodox Co., Ltd.
4F, 88 Chien Kuo N. Rd., Sec. 2
Taipei, Taiwan
Tel.: (886-2) 502-3331
Fax: (886-2) 504-1094
Lica Enterprises Co.
4F/1, 7 An Ho Rd., Sec. 2
Taipei, Taiwan
Tel.: (886-2) 702-8147
Fax: (886-2) 709-7392
Taiwan Shiseido Co., Ltd.
148 Shie Yuan Rd.
Chung Li
Taoyuan, Taiwan
Tel.: (886-3) 452-6191
Fax: (886-3) 452-9109
Floratech Asia Co.
12F/1, 99 Chung Shan N. Rd., Sec. 2
Taipei, Taiwan
Tel.: (886-2) 561-4888
Fax: (886-2) 561-4964
USDA Contacts
For a copy of the complete attaché commodity reports from which this article was prepared, contact:
Cotton, Oilseeds, Tobacco and
Seeds Div.
AgBox 1051
FAS/USDA
1400 Independence Ave., SW
Washington, DC 20250-1051
Phone: (202) 720-7420
Fax: (202) 690-4374
For supplier lists and foreign buyer lists:
American Jojoba Association
c/o Arizona Dept. of Agriculture
1688 West Adams
Phoenix, AZ 08007
Phone: (602) 542-0968
Fax: (602) 542-0969
_________________________
Markus Frimmersdorf is an agricultural specialist with the FAS Office of Agricultural Affairs in the U.S. Embassy in Bonn, Germany. Tel. (49-228) 339-2133; Fax: (49-228) 334-697; Email: 104520.250@compuserve.com
Chiou Mey Perng is a marketing specialist in the American Institute in Taipei,Taiwan. Tel.: (886-2) 709-2000, ext. 2316; Fax: (886-2) 709-2054; E-mail: agbonn@fas.usda.gov
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