CITRUS OIL MARKET ANALYSIS

The citrus oil industry is highly dependent on the availability of raw materials like oranges, lemons, and limes. As these fruits are seasonal in nature, their production undergoes fluctuations depending on the climatic conditions in a particular year. Abundant rains during the flowering season can damage the crops and reduce yields. Similarly, drought-like conditions can also impact fruit production.

As a result, long term revenue planning for the citrus oil industry becomes challenging. It impedes the achievement of ambitious growth targets. As per the FAO statistics, citrus production in India registered a decline of 5.6% in 2020 when compared to the previous year. Maintaining consistent quality and supply becomes difficult for citrus oil companies during times of raw material shortfall and high prices.

Market Opportunity - Innovation of Bio-Based Products for Market

The growing consumer demand for natural and sustainable products presents a major opportunity for citrus oil producers to innovate and develop new bio-based products. As consumers are increasingly focused on purchasing sustainable products made from renewable resources, citrus oil producers have a huge opportunity to launch innovative bio-based formulations.

For example, recent studies show promising results of utilizing citrus peel oil in the development of 100% bio-based polymer composites meant to replace traditional plastics (Source: European Bioplastics, 2022 Report). Such eco-friendly product innovations will appeal greatly to environmentally-conscious customers. Such innovative products command premium prices and help diversify revenue streams. With a focus on developing renewable and plant-based alternatives, citrus oil producers have strong potential to tap new market segments and gain an edge over competition.