Patchouli Talk

In a recent preliminary meeting, the Indonesian Essential Oil Council gathered to discuss the current situation of the patchouli market. the main content of the discussion was the too rapid increase in patchouli prices which made foreign buyers take a wait-and-see approach. The low supply of essential oil stocks also puts the sustainability of the patchouli oil business at risk.

Recognizing the risk posed by this rapid price increase, it was mutually agreed to set a ceiling price for patchouli oil and gradually lower the buyback price to stabilize the market.

In response to these concerns, the Indonesian Essential Oil Council organized a webinar titled "Bincang Nilam" on 29 June 2024 via Zoom. The event brought together various industry stakeholders to discuss these important issues, aiming to provide a reliable and transparent source of information.

Patchouli is a commodity that is difficult to substitute both in terms of its commodity and suitable cultivation sites in Indonesia. India is an attractive market for Indonesian exporters, with potential competition from China in the next 23 years. Due to its complex ingredients and distinct aroma when cultivated in other countries, patchouli will remain a unique Indonesian product that cannot be substituted in the international market.

Prices rise due to limited supply and lack of support when prices fall. Mismanagement of prices in the essential oil market can negatively impact farmers and the ecosystem. Cooperation between stakeholders is essential for business sustainability. The patchouli crisis has also caused many F&F companies to reformulate their products using alternatives such as natural synthetic, posing long-term challenges for the Indonesian patchouli industry.

Successful patchouli cultivation requires careful planning and strong cooperation between farmers and exporters to balance price and production quantity. Clear communication and good ethics are essential in this industry. Collaboration in the patchouli industry is essential to increase production and quality. Providing seeds and training for farmers, as well as regular discussions and meetings, help maintain strong relationships between exporters, industry players, farmers, and refiners. To ensure the sustainability of patchouli farming despite climate challenges, it is important to cultivate other crops to maintain income stability.

Exporters need clear guidelines on visibility and sustainability to prevent adverse competition among farmers. Maintaining supply chains, consistency of production, and adopting new refining technologies are critical. Farmers need support in technology, genetics, and farming practices to improve yields. Deliberation between farmers, researchers, and companies is necessary to achieve this goal.

Genetic development and mapping of patchouli in Indonesia can improve product quality and quantity, emphasizing the need for innovative agricultural technologies. The government should train agricultural extension workers on commodities such as patchouli, palm oil, cacao, and pepper, with specialized training to improve the essential oil industry.