A PROFILE OF THE SOUTH AFRICAN ESSENTIAL OILS MARKET VALUE CHAIN

A PROFILE OF THE SOUTH AFRICAN ESSENTIAL OILS MARKET VALUE CHAIN 2016 Directorate Marketing Tel: 012 319 8455 Private Bag X 15 Fax: 012 319 8131 Arcadia E-mail:MogalaM@daff.gov.za 0007 www.daff.gov.za 1

Table of Contents 1. DESCRIPTION OF THE ESSENTIAL OILS INDUSTRY 4 1.1 Production and Production Areas 4 1.1.1 Overview of the essential oils market and its composition 6 1.1.2 Identification of Products 7 2. HARVESTING OF ESSENTIAL OILS 7 2.1 Harvesting 7 2.2 Essential Oils Marketing Activities 7 3. EXPORTS VOLUMES 8 4. SHARE ANALYSIS 30 3.1 Share Analysis 30 5. IMPORTS VOLUMES 34 5. USES OF ESSENTIAL OILS 43 6. QUALITY AND MAINTANANCE OF ESSENTIAL OILS 45 7. ESSENTIAL OIL VALUE CHAIN ANALYSIS 45 8. ESSENTIAL OILS DISTRIBUTION CHANNELS 51 8.1 Value Adding in South Africa 52 9. MARKET ACCESS 53 10. MARKET INTELLIGENCE 57 11. THE ESSENTIAL OILS OF PEPPERMINT 104 11.1 Description of the herb peppermint 104 11.1.1 Properties of peppermint 104 11.1.2 Safety precautions and warnings 104 2

11.1.3 Production levels in South Africa 104 11.1.4 Major production Areas in South Africa 104 11.1.5 Stem, Leaves, and Flowers 105 11.1.6 Essential part of peppermint 105 11.1.7 Post harvest handling 105 11.1.8 The peppermint sale price 106 11.1.9 Essential oils of Peppermint Industrial Utilization 106 11.1.10 Cosmetic Utilization 106 12. ACKNOWLEDGEMENTS 112 3

1. DESCRIPTION OF THE ESSENTIAL OILS INDUSTRY An essential oil is a liquid that is generally distilled (most frequently by steam or water) from the leaves, stems, flowers, bark, roots, seeds, fruits or other organs of a plant. Using the different technologies available essential oils are sourced from over 3,000 plants of which approximately 300 are of commercial importance. Most flowers contain very little volatile oil and their chemical components are too delicate and easily denatured by the high heat used in steam distillation. A solvent such as hexane or supercritical carbon dioxide is used to extract the essential oils. Extracts from hexane and other hydrophobic solvents are called concretes, which is a mixture of essential oil, waxes, resins, and other lipophilic (oil soluble) plant material. The majority of essential oils are usually obtained from agricultural plants but a number of oils are collected from wild sources including trees. The strengths of essential oils They are antibacterial, antiviral, antifungal, and antimicrobial. Essential oils by-pass the digestive system so they are beneficial for people with poor digestion/assimilation. They require no refrigeration and require very little storage space. They have the longest shelf life of any plant known to man. Essential oils are highly oxygenating. They are very cost-effective because they are one of the few substances that the more you use them, the less you need them. They are suitable for babies since they cannot swallow tablets and capsules thus essential oils provide a solution as they only come in liquid form. Weakness of the Essential Oils industry (Production Constraints) Production of essential oils requires highly focused farm practices and field maintenance for high quality yield. Requires more technical support, including the production inputs and most effective plant material for new plantings There is a high entry barrier which includes fencing, cuttings, distillation plants and land preparation. 1.1 Production and Production Areas The major producers of essential oils across the world are Brazil, China, USA, Egypt, India, Mexico, Guatemala, Morocco and Indonesia. All of them with the exception of USA are developing countries with low cost, peasant type economies. It is estimated that about 65% of world production emanates from developing countries. The major consumers are the USA (40%), Western Europe (30%) and Japan (7%). While the EU as a whole dominate world trade, exports and imports, no individual country from this bloc features in the list of major producers. 4

Most of the major producing countries have large populations with huge internal appetite for essential oils. The table below shows the projected hectares under essential oil crops given by provinces in South Africa in 2014. Table 1 below shows the estimated hectares of essential oil crops of different species planted by different Provinces in South Africa during 2015. Table 1: The projected hectare (ha) under essential oil crops in 2015 as given by Provinces. Province Species TOTAL ha Mpumalanga Vetiver, Citronella, Lippia, Eucalyptus, Artemisia, Rosemary, 942 Geranium, Lemon grass Free State Tagete, Artemisia, Lavendin 71 Northern Cape Marjoram, Rosemary, Lavendin 44 North West Geranium, Rosemary, Lavendin, Chamomile 39 Eastern Cape Geranium, Rosemary, Lavender 220 Western Cape Eriocephalus, Lavender, Lavandin, Buchu, Rosemary 78 Limpopo & Lippia, Geranium, Rosemary, Lavendin, Tea tree 92 Machado Gauteng Lavendin, Rosemary, Artemisia 83 KwaZulu-Natal Lavendin, Rosemary Eucalyptus, Geranium, Tea tree, Lemon tea tree, Spear Mint, Lemon grass, Artemisia, Melissa, Thyme 425 TOTAL 1994 These estimates exclude wild harvesting and community projects in progress Source: South African Essential Oil Producer Association (SAEOPA) The table above shows that in the Mpumalanga Province, the projected hectares planted with essential oils crops are at 942 ha in 2015, followed by KwaZulu-Natal Province with 425 ha and Eastern Cape with 220 ha. The estimated total hectares devoted to essential oil crops by all the provinces in 2015 were about 1994 ha. However of all the total species estimated, Geranium, Lavendin and Rosemary were the most projected species to be planted in all provinces in 2015. The table further shows that throughout South Africa, Mpumalanga and KwaZulu-Natal Provinces were projected to be the major producers of most kinds of essential oil species than the other provinces during 2015. Table 2: Estimated Production Statistics for certain selected Essential Oils 2015. OIL TYPES ESTIMATED VALUE OF PRIMARY PRODUCTION Major Oil (Citrus) and Eucalyptus) R7 444 526.00 5

Minor Oils (e.g. Chamomiles, Jasmine, Lavenders, Tea R2 237 169.75 Trees, Mints) Minor Oils-FRIDGE Study - Specified Geranium (Pelargonium Graveolens Roseum) R541 666.67 Buchu (Betulina, Crenulata) 500 000.00 Chamomile Roman (Anthemis nobilis) R24 305.56 Rosemary (Rosmarinus Officinalis) R15 000.00 Lemon Grass (Cymbopogon Citratus) R7 777.78 Lemon balm (Melissa officinalis) - Lippia (Lippia javanica) - Rose Damascene (Rosa Damascene) - Source: Institute of Natural Resources Table 2 indicates different types of essential oils and the estimated values of primary production in 2015 marketing season. Table 3: The most utilized essential oils and major producers during 2015 Product Country Orange Corn mint Eucalyptus (cineole-type) Citronella Peppermint Lemon Clove leaf Cedar wood Litsea cubeba Sassafras Lime Spearmint Source: South African Essential Oil Producer Association (SAEOPA) Australia, Brazil, Dominican Republic, Israel, Italy and USA Brazil, China, India, Japan, North Korea, Paraguay, Taiwan and Thailand Australia, Austria, Brazil, China, India, Paraguay, Portugal, South Africa and Spain China, India and Vietnam Australia, China, Italy, Japan and USA Argentina, Australia, Brazil, Greece, Spain, Italy, USA and Peru Brazil, Indonesia, Madagascar, Sri Lanka and Tanzania USA and China China Brazil and USA Brazil, China, Cuba, Ghana, Haiti, Ivory Coast, Jamaica, Mexico and Peru Argentina, Australia, Brazil, Bulgaria, China, Egypt, France, Hungary, Japan, Korea, Morocco, New Zealand, Paraguay, Romania, Russia, Taiwan, UK, USA and Yugoslavia Table 3 indicates the most utilized essential oil products and its major producers in South Africa during 2015/16 marketing season. 1.1.1 Overview of the essential oils market and its composition Production data for essential oils are hard to find, as it is very difficult to do an exhaustive compilation covering the broad spectrum of all of essential oils produced. The essential oil industry 6

is dynamic with tastes and preferences of consumers changing by the day. The top 10 crops in terms of production account for about 80% of the total world market for essential oils. One of the most important things to do for farmers who want to be involved in essential oils production is selecting the right seed or plant material for sowing. It is recommended that this be obtained from a reputable supplier. Farmers should also be knowledgeable on weed control and management as this will affect the quality of the end product. If weeds are harvested and distilled with the crop, the oil from weeds can contaminate the desired oil, which would compromise quality. These would lead to a total rejection of the crop s oil which will have a negative impact on the farm income. 1.1.2 Identification of Products Given the appropriate equipment, essential oils can be fractionated and components sold individually. Alternatively, at home industry level, essential oils can be used in scented candles, soaps, and hand creams. Some authors are of the view that massaging oils into the human skin as in aromatherapy is of little therapeutic value, although it may induce a sense of sensual wellbeing. However, in spite of the lack of a scientific basis for aromatherapy, it remains a viable component of the market for the South African essential oils industry. There are numerous ways to create value added products through the use of essential oils. Based on information gathered from a brief overview of the essential oil sub sector map and value chain, it has been decided that the following value added products will be investigated further, completing each investigation with a sub sector map for that product. The products are; Soaps, Scented candles, Bath salts, Aromatherapy creams and lotions and Potpourri. It has been determined that each of these identified products are relatively simple to make, thus making use of the home based production units, and have a viable market within South Africa, and particularly, the Eastern Cape. Each of these products will be discussed in detail. 2. HARVESTING OF ESSENTIAL OILS 2.1 Harvesting It must be noted that the essential oils can be harvested as either plants or seeds. For the plants the proximity of the steam distillation plant is important. If the period between harvesting and distillation is too long the oil from the plant can evaporate or decline in quality. The quality of the oil is volatile. It changes as the crop grows; this means that a farmer should ensure that the crop is harvested at the right time. 2.2 Essential Oils Marketing Activities The marketing structure of essential oils is not different from other most products. The traditional structure begins with the producer who sells to the flavour and fragrance industries. Fragrance houses may or may not embark on value adding to the product, they then sell it to the end users. At times system has been supplemented by traders, agents and brokers who use their knowledge to market niches and buy directly from producers and sell directly to the flavour houses or end users. Although it is very difficult to enter into the essential oils industry from either side, as 7

Export quantity (tons) producers or end users, there is always an opportunity for small players. The reason for the difficulty in gaining entry is that once end users have developed a product using specific oil they do not want to change that oil or the supplier as they may fear a compromise in quality. Small scale farmers may enter the market and target small industries such as Aromatherapy and Massage for their product market. 3. EXPORTS VOLUMES Figure 1 below indicates export volumes of essential oils (terpeneless or not), from South Africa to the world between 2006 and 2015. 250 Figure 1: Export volumes of essential oils (terpeneless or not) to the world 200 150 100 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Africa 222 148 146 129 56 3 0 0 0 0 Americas 37 16 3 10 15 0 0 0 0 0 Asia 1 18 6 5 1 0 0 0 0 0 Europe 174 161 144 170 102 0 0 0 0 0 Oceania 80 61 60 42 0 0 0 0 0 0 Source: Quantec EasyData Period (Years) The figure further indicates that the major export markets for essential oils (terpeneless or not) from South Africa to the world was Europe, followed by Africa, Americas, Oceania, and Asia which had very low levels of exports of essential oils (terpeneless or not) between 2006 and 2015. The figure also indicates that exports of essential oils (terpeneless or not) from South Africa to Europe attained a peak in 2006 at approximately 174 tons. The figure further indicates that exports of essential oils (terpeneless or not) from South Africa to Africa has increased in 2006 to levels of approximately 222 tons. The figure also indicates that exports of essential oils (terpeneless or not) from South Africa to Africa attained a peak in 2006 at approximately 222 tons. The figure further indicates that exports of essential oils (terpeneless or not) from South Africa to Oceania was at peak in 2006 of approximately 80 tons. Figure 1 also indicates that the demand for essential oils (terpeneless or not) from South Africa to Americas and Asia was less as compared to what South Africa exported to Europe, Africa and Oceania between 2006 and 2015. The figure also indicates that exports of essential oils (terpeneless or not) from South Africa to Europe and Africa declined from 2006 to 2008 and later increased in 2009 to approximately 170 tons. The figure also indicates 8

that there was a 100% decline in exports of essential oils (terpeneless or not) from South Africa to Europe and Africa from 2011 to 2015 as compared to 2010 marketing season. Figure 2 depicts export volumes of essential oils (terpeneless or not) from South Africa to Africa between 2006 and 2015. Source: Quantec EasyData The figure further depicts that the major market for essential oils (terpeneless or not) from South Africa to Africa was SADC, followed by low volumes of essential oils (terpeneless or not) to Eastern Africa Rest and Western Africa between 2006 and 2015. The figure also depicts that exports of essential oils (terpeneless or not) from South Africa to SADC were at 211 tons in 2006 and reached a peak of approximately 211 tons in 2006. The figure further indicates that during the first half of ten year period (2006-2010), South Africa exported high volumes of essential oils (terpeneless or not) to SADC. The figure further depicts that exports volumes of essential oils (terpeneless or not) from South Africa to Eastern Africa attained its peak in 2006 at approximately 10 tons respectively. Western Africa had low levels of exports of essential oils (terpeneless or not) from South Africa of approximately 1 ton and Middle Africa Rest had very low level of exports of essential oils (terpeneless or not) from South Africa of not more than 1 ton per annum. The figure also depicts that the demand for essential oils (terpeneless or not) from South Africa to Western Africa, Middle Africa Rest and Eastern Africa was less as compared to what South Africa exported to SADC between 2006 and 2015. The figure further depicts that between 2011 and 2014 of the period under scrutiny, there were no export volumes of essential oils (terpeneless or not) from South Africa to all the African regions. Between 2011 and 2015, there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to SADC as compared to 2010 marketing season. Figure 3 below illustrates export volumes of essential oils (terpeneless or not) from South Africa to SADC member states between 2006 and 2015. 9

Source: Quantec EasyData The graph further illustrates that the major attractive market for essential oils (terpeneless or not) from South Africa to SADC was Mauritius, followed by Mozambique and Malawi over the past decade (2006-2015). The graph further illustrates that exports of essential oils (terpeneless or not) from South Africa to Mauritius started to decrease substantially in 2006 with approximately 40 tons, followed by a slight increase in 2007 of approximately 58 tons. The graph further illustrates that the level of exports of essential oils (terpeneless or not) from South Africa to Mauritius experienced a notable increase in 2008 of 77 tons and a peak was later attained in 2008 at approximately 77 tons. The graph further illustrates that Mozambique attained a peak in 2006 at approximately 122 tons. The figure also illustrates that Malawi attained a peak in 2008 at approximately 26 tons between 2006 and 2015. South Africa exported very low volumes of essentials oils (terpeneless or not) to Angola, Democratic Republic of Congo and United Republic of Tanzania of not more than 13 tons per annum. In 2011, 2012, 2013, 2014 and 2015, there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to SADC region as compared to 2010 marketing season. Figure 4 below depicts export volumes of essential oils (terpeneless or not) from South Africa to Americas between 2006 and 2015. 10

Source: Quantec EasyData The graph further depicts that the most attractive market for essential oils (terpeneless or not) exports from South Africa to Americas was NAFTA between 2006 and 2015. The graph also depicts that essential oils (terpeneless or not) exports from South Africa to NAFTA attained a peak in 2006 at approximately 37 tons. It is generally clear that essential oils (terpeneless or not) exports from South Africa to NAFTA were from a high base during the first half (2006-2010) of the ten year period as compared to the second half (2011-2015) of the ten year period. The graph also depicts that between 2011 and 2015 of the period under scrutiny, there were no essential oils (terpeneless or not) exports from South Africa to NAFTA. The figure further depicts that there was 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to NAFTA between 2011 and 2015 as compared to 2010 marketing season. Figure 5 below indicates export volumes of essential oils (terpeneless or not) from South Africa to Asia between 2006 and 2015. 11

Source: Quantec EasyData The graph further indicates that the major export destination for essential oils (terpeneless or not) from South Africa to Asia was South-central Asia, followed by Western and South-eastern Asia. The graph also indicates that exports of essential oils (terpeneless or not) from South Africa to Western Asia and South-eastern Asia were below 7 tons per annum over the past decade (2006-2015). The graph further indicates that export volumes of essential oils (terpeneless or not) from South Africa to South-central Asia started with decline of approximately 0 tons in 2006, and then 100% increase occurred in 2007 where a peak was reached of approximately 17 tons. The graph further indicates that export volumes of essential oils (terpeneless or not) from South Africa to South-central Asia were from a low base during the second half (2011-2015) of the ten year period reaching not more than 1 ton per annum. Between 2011 and 2015, there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to Asian regions (Southcentral Asia, Southern Eastern and Western Asia) as compared to 2009 marketing season. Figure 6 below depicts export volumes of essential oils (terpeneless or not) from South Africa to Europe between 2006 and 2015. 12

Export quantity (tons) 200 180 160 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Western Europe Rest 2 2 4 2 1 0 0 0 0 0 European Union 172 160 140 168 101 0 0 0 0 0 Source: Quantec EasyData Figure 6: Export volumes of essential oils (terpenelesss or not) to Europe Period (Years) The figure further depicts that the major export destination for essential oils (terpeneless or not) from South Africa to Europe went to the European Union followed by very low export volumes of essential oils to Western Europe Rest. The figure also depicts that export volumes of essential oils (terpeneless or not) from South Africa to European Union started at peak in 2006 of approximately 172 tons, followed by decline in 2007 and 2008 of approximately 160 and 140 tons respectively The figure further depicts that export volumes of essential oils (terpeneless or not) from South Africa to the European Union increased significantly to approximately 168 tons in 2009. The figure also indicates that South Africa was exporting low volumes of essential oils (terpeneless or not) to Western Europe Rest from 2006 to 2010 of not more than 4 tons. The figure also depicts that between 2011 and 2015, there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to the European Union and Western Europe Rest as compared to 2010 marketing season. Figure 7 illustrates export volumes of essential oils (terpeneless or not) from South Africa to the European Union between 2006 and 2015. 13

Source: Quantec EasyData The graph further illustrates that the major export destination for essential oils (terpeneless or not) from South Africa to the European Union was Germany, followed by low export volumes of essentials oils (terpeneless or not) to France and Spain between 2006 and 2015. Netherlands, United Kingdom and Belgium imported very low volumes of essential oils (terpeneless or not) from South Africa of not more than 26 tons per annum between 2006 and 2015. The graph further illustrates that export volumes of essential oils (terpeneless or not) from South Africa to Germany started to decrease by approximately 100 tons, followed by slight decrease in 2008 of approximately 92 tons, and later attained a peak in 2009 at approximately 107 tons. France attained its peak in 2006 at approximately 46 tons, followed by decline in 2008 of approximately 8 tons, while Spain had low volumes of approximately 14 tons in 2006 and later attained a peak in 2010 at approximately 30 tons. Between 2011 and 2015, there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to European Union countries as compared to 2010 marketing season. Figure 8 below indicates export volumes of essential oils (terpeneless or not) from South Africa to Oceania between 2006 and 2015. 14

Source: Quantec EasyData The figure further indicates that exports of essential oils (terpeneless or not) from South Africa to Oceania went to Australia and New Zealand during the period under scrutiny (2006-2015). The figure also indicates that export volumes of essential oils (terpeneless or not) from South Africa to Australia and New Zealand started to decrease in 2006 and at the same time attained a peak at approximately 79 tons. During the second half of the ten year period (2011-2015), export volumes of essential oils (terpeneless or not) from South Africa to Australia and New Zealand were from a low base reaching a maximum of not close to 1 ton per annum during the same period under examination. The figure also indicates that there were no exports of essential oils (terpeneless or not) from South Africa to Australia and New Zealand between 2011 and 2015 marketing season. The figure further indicates that there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to Australia and New Zealand from 2010 to 2015 as compared to 2009 marketing season. Figure 9 below shows export volumes of essential oils (terpeneless or not) from South Africa to Australia and New Zealand between 2006 and 2015. 15

Source: Quantec EasyData The figure further shows that export volumes of essential oils (terpeneless or not) from South Africa to Australia and New Zealand region went to Australia during the period under scrutiny (2006-2015). The figure also shows that export volumes of essential oils (terpeneless or not) from South Africa to Australia started to increase in 2006 and at the same time attained a peak at approximately 79 tons, followed by a decrease from 2007 to 2009 of approximately 60 tons and 42 tons respectively. The figure also shows that there was a 100% decline in export volumes of essential oils (terpeneless or not) from South Africa to Australia between 2010 and 2015 as compared to 2009 marketing season. Figure 10 below depicts values of essential oils (terpeneless or not) exports by provinces of South Africa to the world between 2006 and 2015. 16

Source: Quantec EasyData 17

Figure 10 further illustrates that the major suppliers of essential oils (terpeneless or not) from South Africa to the world was Gauteng province, followed by Western Cape, Mpumalanga and other provinces with limited volumes such as Eastern Cape, KwaZulu-Natal, Limpopo, North West and Free State provinces. The figure also indicates that export values of essential oils (terpeneless or not) from Gauteng province to the world started to increase substantially in 2010 at approximately R147 million until a peak was attained in 2015 at about R243 million. Export values of essential oils (terpeneless or not) from Western Cape Province to the world attained a peak in 2008 at approximately R86.7 million, while Mpumalanga Province attained a peak in 2015 at approximately R28,3 million. Eastern Cape, Free State, KwaZulu-Natal, Northern Cape, North West and Limpopo provinces had very low export values of essential oils (terpeneless or not) to the world during the period under examination of not more than R25 million per annum. The figure also illustrates that there was a 25% increase in export values of essential oils (terpeneless or not) from Gauteng Province to the world in 2015 as compared to 2014 marketing season. 18

Figure 11 below indicates export value of essential oils (terpeneless or not) from Gauteng Province to the world between 2006 and 2015 Source: Quantec EasyData 19

The figure further indicates that the major supplying market for essential oils (terpeneless or not) from Gauteng Province to the world was the City of Johannesburg Metropolitan Municipality, followed by the City of Tshwane Metropolitan Municipality and West Rand District Municipality during the period of 10 years under observation (2006-2015). The figure also indicates that exports of essential oils (terpeneless or not) by the City of Johannesburg Metropolitan Municipality to the world were from a low base during the first half of the ten year period (2006-2010) attaining higher levels of about R128 million in 2010. Export values of essential oils (terpeneless or not) by the City of Johannesburg Metropolitan Municipality to the world were from a high base during the second half of the ten year period (2011-2015) attaining higher levels and a peak in 2011 of about R131.8 million. Export values of essential oils (terpeneless or not) from the City of Tshwane Metropolitan Municipality to the world attained a peak in 2018 at approximately R113 million during the period under review. Sedibeng, West Rand District Municipalities and Ekurhuleni Metropolitan Municipality had very low export values of essential oils (terpeneless or not) to the world during the period under examination of not more than R1.8 million per annum. The figure indicates that there was a 40% increase in export values of essential oils (terpeneless or not) from City of Johannesburg Metropolitan Municipality in 2015 as compared to 2014 marketing season. 20

Figure 12 shows export values of essential oils (terpeneless or not) from Western Cape Province to the world between 2006 and 2015. Source: Quantec EasyData 21

The figure further shows that the major exporter of essential oils (terpeneless or not) from Western Cape Province to the world was Cape Winelands District Municipality, followed by the City of Cape Town Metropolitan Municipality between 2006 and 2015. The figure also shows that export values of essential oils (terpeneless or not) from the Cape Winelands District Municipality to the world were from a low base during the first half of the ten year period (2006-2010) and a peak was attained in 2008 at approximately R43 million. In 2010, a peak in export values of essential oils (terpeneless or not) from the City of Cape Town Metropolitan Municipality to the world was also attained at approximately R18 million. The figure further shows that during the second half of the ten year period (2011-2015) from the City of Cape Town Metropolitan Municipality to the world was also attained a peak at approximately R16,6 million in 2012, however followed by decline in export value of R7 million during 2013. Exports of essential oils (terpeneless or not) from the Cape Winelands District Municipality to the world attained a maximum of about R43 million in 2008, and attained a peak in 2014 of R58 million. The figure also shows that there was a 29% decline in export values of essential oils (terpeneless or not) from Cape Winelands District Municipality in 2015 as compared to 2014 marketing season. 22

Figure 13 depicts export values of essential oils (terpeneless or not) from KwaZulu-Natal Province to the world between 2006 and 2015. Source: Quantec EasyData 23

The figure further depicts that the major exporter of essential oils (terpeneless or not) from KwaZulu-Natal province to the world was ethekwini Metropolitan Municipality, followed by UMgungundlovu and UThungulu District Municipalities and other District Municipality namely, Zululand, UThukela, Sisonke and Ugu District Municipalities exported low levels of essential oils (terpeneless or not) to the world. The figure further depicts that export values of essential oils (terpeneless or not) from ethekwini Metropolitan Municipality to the world were from a low base during the first half of the ten year period (2006-2010) attaining a minimum peak in 2010 of approximately R4.5 million. During the second half of the ten year period (2011-2015), export values of essential oils (terpeneless or not) from ethekwini Metropolitan Municipality to the world were from a high base attaining a maximum peak of about R29 million in 2015. Exports of essential oils (terpeneless or not) from UMgungundlovu District Municipality to the world attained a peak in 2011 of approximately R1.9 million, while exports of essential oils (terpeneless or not) from UThungulu District Municipality to the world attained a peak in 2014 of approximately R5.3 million. The figure also depicts that that export values of essential oils (terpeneless or not) from Ugu, UThukela, Sisonke and Zululand District Municipalities were very low during the period under scrutiny. The figure depicts that there was a 31.8% decline in export values of essential oils (terpeneless or not) from ethekwini Metropolitan Municipality in 2015 as compared to 2014 marketing season. 24

Figure 14 indicates export values of essential oils (terpeneless or not) from Eastern Cape Province to the world between 2006 and 2015. Source: Quantec EasyData 25

The figure further indicates that the major exporter of essential oils (terpeneless or not) from the Eastern Cape Province to the world was Cacadu District Municipality, followed by low export volumes from Nelson Mandela Metropolitan Municipality, Buffalo City Metropolitan and Alfred Nzo District Municipality over the ten years (2006-2015). The figure also indicates that there were no exports of essential oils (terpeneless or not) in Alfred Nzo Municipality in 2006 due to shortages in the domestic market. Cacadu District, Nelson Mandela Metropolitan and Buffalo City Metropolitan Municipality exported essential oils (terpeneless or not) to the world 2006 season. The figure also indicates that export values of essential oils (terpeneless or not) from the Nelson Mandela Metropolitan Municipality to the world were very low between 2006 and 2012 and not more than R2.2 million per annum. The figure further indicates that export values of essential oils (terpeneless or not) from the Nelson Mandela Metropolitan Municipality to the world started to increase substantially in 2010 and at the same time attained a peak at approximately R2.8 million. Essential oils (terpeneless or not) exports from Buffalo City Metropolitan Municipality to the world attained a peak in 2014 at approximately of R3.9 million, and Alfred Nzo District Municipality attained a peak also in 2015 of approximately R51 247. The figure further indicates that export values of essential oils (terpeneless or not) from Cacadu District Municipality to the world started to increase substantially in 2015 and at the same time attained a peak at approximately R41 million. The figure also indicates that there was 70% increase in export value of essential oils (terpeneless or not) from Cacadu District Municipality to the world in 2015 as compared to 2014 marketing season. 26

Figure 15 below illustrates export values of essential oils (terpeneless or not) from Free State Province to the world between 2006 and 2015. Source: Quantec EasyData 27

The graph further illustrates that Thabo Mofutsanyane District Municipality was the major exporter of essential oils (terpeneless or not) from Free State Province to the world, followed by Mangaung District Municipality over the period of 10 years (2006-2015). The graph also illustrates that export values of essential oils (terpeneless or not) from Thabo Mofutsanyane District to the world started with low exports in 2006 of approximately R66 563, however from 2007 to 2010 the value of essential oils exports increased substantially and attained a peak in 2013 at approximately R3.5 million, while export values of essential oils (terpeneless or not) from Mangaung District Municipality to the world attained a peak also in 2006 of approximately R799 675. Xhariep District Municipality and Lejweleputswa District Municipality exported essential oils only in 2014 and 2015 and Fezile Dabi District Municipality in 2015 and thus the peak periods for the district municipalities. There was 23% decline in export value of essential oils (terpeneless or not) from Thabo Mofutsanyane District Municipality to the world from 2015 as compared to 2014 marketing season. Figure 16 below shows export values of essential oils (terpeneless or not) from Limpopo Province to the world between 2006 and 2015. Source: Quantec EasyData The figure further shows that Capricorn District Municipality was the main exporter of essential oils (terpeneless or not) from Limpopo Province to the world during the period under scrutiny (2006-2015), followed by Vhembe and Mopani District Municipalities. The figure further shows that there were no exports of essential oils (terpeneless or not) from Vhembe, Waterberg, Mopani and Capricorn District Municipalities in 2006. In 2006, all the district municipalities did not export essential oils and in 2007 only Capricorn District Municipality exported the product at a value of R938 131 to the world. There were no exports of essential oils from 2006 to 2013 in Waterberg District Municipality to the world. Export value of essential oils (terpeneless or not) from Capricorn 28

District Municipality to the world attained a peak in 2015 of approximately R39 million. Export value of essential oils (terpeneless or not) from Mopani District Municipality to the world attained a peak in 2015 at approximately R1.4 million and export value of essential oils from Vhembe District Municipality to the world attained a peak in 2013 of approximately R14.9 million. The figure shows that there was a 49% increase in export values of essential oils (terpeneless or not) from Capricorn District Municipality to the world in 2015 as compared to 2014 marketing season. Figure 17 shows export values of essential oils (terpeneless or not) from Mpumalanga Province to the world between 2006 and 2015. Source: Quantec EasyData The figure further shows that exports of essential oils (terpeneless or not) from Mpumalanga Province to the world were mainly from Gert Sibande District Municipality, followed by Ehlanzeni District Municipality during the past ten years under examination (2006-2015). The figure also shows that export values of essential oils (terpeneless or not) from Gert Sibande District Municipality to the world started to increase in 2006, until a peak was attained in 2015 at approximately R18.9 million. The figure also shows that export values of essential oils (terpeneless or not) from Ehlanzeni District Municipality to the world attained a peak in 2015 at approximately R9.3 million. Exports of essential oils (terpeneless or not) from Ehlanzeni District Municipality to the world increased to approximately R5.9 million in 2013. The figure depicts that there was a 6% increase in export values of essential oils (terpeneless or not) from Gert Sibande District Municipality in 2015 as compared to 2014 marketing season. Figure 18 below illustrates export value of essential oils (terpeneless or not) from North West Province to the world between 2006 and 2015. 29

Source: Quantec EasyData The figure further illustrates that exports of essential oils (terpeneless or not) from North West Province to the world were originated mainly from Bojanala District Municipality and low levels of exports were achieved from Ngaka Modiri Molema District Municipality to the world (2006-2015). The figure also illustrates that between 2006 and 2012 of the period under scrutiny, there were no exports of essential oils (terpeneless or not) from Ngaka Modiri Molema and other district Municipalities to the world. The figure further illustrates that export values of essential oils (terpeneless or not) from Bojanala District Municipality to the world started to increase in 2006 and attained a peak in 2015 at approximately R12.3 million. Between 2009 and 2013, the value of exports of essential oils (terpeneless or not) from Bojanala District Municipality to the world increased to approximately R5 million as compared to low production levels that occurred in 2006 and 2008 at approximately R0.5 million. The figure illustrates that there was a 13% increase in export values of essential oils (terpeneless or not) from Bojanala District Municipality to the world in 2015 as compared to 2014 marketing season. 4. SHARE ANALYSIS 3.1 Share Analysis Table 4 below indicates that Gauteng Province commanded the greatest market share of essential oils (terpeneless or not) exports to the world between 2006 and 2015, followed by Western Cape Province. The trend indicate that the greatest percentages of essential oils (terpeneless or not) exports were recorded as originating from both Gauteng and Western Cape Provinces whereas other provinces recorded small percentages between 2006 and 2015. 30

Table 4: Share of provincial essential oils (terpeneless or not) exports to the total South African essential oils exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Districts Western Cape 36.0 29.9 45.7 36.8 20.5 14.9 19.9 13.3 18.2 12.7 Eastern Cape 0.3 0.1 0.4 2.9 5.8 0.8 1.6 2.1 7.3 9.0 Free State 1.0 0.7 0.4 0.3 0.3 0.3 0.4 1.3 0.8 0.6 KwaZulu- Natal 3.7 2.2 2.0 2.2 3.2 2.9 3.4 4.7 7.5 7.7 North West 0.4 0.7 0.3 1.0 1.8 2.4 1.6 3.6 2.2 2.7 Gauteng 37.9 44.1 41.1 43.7 58.5 65.0 54.7 58.0 50.3 52.4 Mpumalanga 20.7 21.5 4.1 10.7 4.8 6.6 7.3 7.4 5.8 6.1 Limpopo 0.0 0.9 6.1 2.3 5.2 7.2 11.0 9.5 7.7 8.8 Source: Calculated from Quantec Table 5 below indicates that in Western Cape Province, the greatest market share of essential oils (terpeneless or not) exports occur mainly through the Cape Winelands District Municipality) over the past decade. Table 5: Share of the district essential oils (terpeneless or not) exports to the total Western Cape Province essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 District City of Cape Town 11.81 32.17 49.92 25.61 36.26 23.99 42.04 20.42 15.00 28.00 West Coast 5.08 1.08 0.16 0.40 0.27 0.54 0.76 2.04 1.05 1.90 Cape Winelands 83.07 66.18 49.91 73.78 62.56 73.82 56.53 76.77 83.51 69.74 Overberg 0.00 0.58 0.00 0.14 0.39 0.38 0.18 0.62 0.25 0.19 Eden 0.05 0.00 0.01 0.07 0.52 1.26 0.48 0.14 0.19 0.17 Source: Calculated from Quantec Table 6 illustrates that in the Eastern Cape Province, essential oils (terpeneless or not) exports occurred mainly in the Nelson Mandela Metropolitan Municipality during the period of ten years. Table 6: Share of district essential oils (terpeneless or not) exports to the total Eastern Cape Province essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Districts Cacadu Alfred Nzo 78.6 0.00 0.00 33.9 0.70 13.6 11.2 99.8 85.83 97.41 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.12 31

Nelson Mandela Bay 0.04 3.50 100.00 60.7 96.7 85.9 88.6 0.01 0.06 0.42 Buffalo City 21.3 96.5 0.00 5.30 2.56 0.38 0.09 0.14 14.01 2.04 Source: Calculated from Quantec Table 7 indicates that in Limpopo province, exports of essential oils (terpeneless or not) originated mainly from the Capricorn District throughout the period under review. Table 7: Share of district essential oils (terpeneless or not) exports to the total Limpopo Province essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Districts Mopani 0.0 0.0 6.3 13.3 0.0 4.4 0.00 0.00 0.00 3.6 Vhembe 0.0 0.00 22.4 0.1 3.60 25.2 67.8 58.5 11.2 0.0 Capricorn 0.0 100 71.3 86.6 96.4 70.4 32.2 41.5 88.4 96.0 Waterberg 0.0 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.3 Source: Calculated from Quantec Table 8 below illustrates that in KwaZulu-Natal province, essential oils (terpeneless or not) exports originated mainly from ethekwini Metropolitan Municipality with menial exports from other districts over the past ten years (see Table 8 below). Table 8: Share of district essential oils (terpeneless or not) exports to the total KwaZulu- Natal essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Districts Ugu UMgungundlovu Uthukela Zululand Uthungulu Sisonke 0.0 0.0 0.0 0.6 0.0 0.2 0.0 0.0 0.0 0.0 0.0 2.7 6.4 0.0 19.0 28.8 20.7 12.0 1.6 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.9 0.0 0.0 4.5 0.0 0.5 0.0 2.2 1.7 1.7 1.2 5.3 12.5 33.4 2.1 23.9 8.2 35.6 9.4 18.3 14.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 32

ethekwini 94.7 84.8 55.7 97.3 56.6 62.9 41.5 76.9 78.0 82.8 Source: Calculated from Quantec Table 9 depicts that in North West province, exports of essential oils (terpeneless or not) originated mainly from the Bojanala District Municipality throughout the period under review. Table 9: Share of district essential oils (terpeneless or not) exports to the total North West Province essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 District Bojanala 100 100 100 100 100 100 100 100 100 99.9 Ngaka Modiri Molema 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 Source: Calculated from Quantec Table 10 below depicts that in Gauteng province, exports of essential oils (terpeneless or not) originated mainly from the City of Johannesburg Metropolitan Municipality throughout the period under review. Table 10: Share of district essential oils (terpeneless or not) exports to the total Gauteng Province essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Districts West Rand 3.10 1.25 0.94 2.42 0.73 0.67 1.24 0.84 6.69 5.83 Ekurhuleni 3.10 1.25 0.94 2.42 0.73 0.67 1.24 0.84 6.69 5.83 City of Johannesburg 77.70 82.84 81.51 68.59 86.86 85.60 77.67 79.42 41.87 47.24 City of Tshwane 19.20 15.81 17.51 28.84 12.37 13.70 21.09 19.74 50.84 46.59 Source: Calculated from Quantec Table 11 below indicates that in Mpumalanga province, Gert Sibande District Municipality commanded the greatest share of essential oils (terpeneless or not) exports over the past decade. Table 11: Share of district essential oils (terpeneless or not) exports to the total Mpumalanga Province essential oils (terpeneless or not) exports (%) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 33

Districts Gert Sibande 29.63 29.51 96.88 100.00 87.80 75.42 98.86 70.58 79.42 67.03 Ehlanzeni 70.37 70.49 3.12 0.00 12.20 24.58 1.14 29.42 20.58 32.97 Source: Calculated from Quantec 5. IMPORTS VOLUMES Figure 19 shows import volumes of essential oils (terpeneless or not) from various regions of the world to South Africa between 2006 and 2015. Source: Quantec EasyData The graph further shows that the major import market for essential oils (terpeneless or not) from various regions was Europe, followed by Asia and Americas between 2006 and 2015. The figure further shows that import volumes of essential oils (terpeneless or not) from Europe into South Africa were from a high base during the first half of the ten year period (2006-2010) attaining a peak in 2007 of approximately 93 tons. During the second half of the ten year period (2011-2015), import volumes of essential oils (terpeneless or not) from Europe into South Africa attained a maximum of 24 tons in 2010. The figure also shows that import volumes of essential oils (terpeneless or not) Asia into South Africa attained a peak in 2009 of approximately 98 tons, while imports of essential oils (terpeneless or not) from Americas into South Africa attained a peak in 2006 of approximately 35 tons. Africa and Oceania had very low levels of imports of essential oils (terpeneless or not) to South Africa over the same period under review of not more than 15 tons per annum. Between 2011 and 20154, there was a 100% decline in imports of essential oils (terpeneless or not) from Europe, Asia, Africa, Oceania and Americas into South Africa as compared to 2010 marketing season. 34

Import quantity (tons) Figure 20 below indicates import volumes of essential oils (terpeneless or not) from Africa into South Africa between 2006 and 2015. Figure 20: Import volumes of essential oils (terpeneless or not) from Africa 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Eastern Africa Rest 1 0 1 2 1 0 0 0 0 0 Northern Africa 0 0 1 1 0 0 0 0 0 0 SADC (excluding SACU) 1 2 1 1 0 0 0 0 0 0 SACU (Excluding RSA) 0 0 0 Period (Years) 0 12 4 0 0 0 0 Source: Quantec EasyData The figure further indicates that the major import market for essential oils (terpeneless or not) from Africa into South Africa was the SACU region, followed by Eastern Africa, SADC and very minimal imports of essential oils (terpeneless or not) from Northern Africa during the past decade (2006-2015). The figure show that import volumes of essential oils (terpeneless or not) from SACU region into South Africa started in 2010 and reached peak of approximately 12 tons in 2010.The figure also indicates that imports of essential oils (terpeneless or not) from SADC region into South Africa started to increase in 2007 and attained a peak of approximately 2 tons in 2007. The figure further indicates that the demand for essential oils (terpeneless or not) from SADC into South Africa was far less as compared to what Eastern Africa exported to South Africa between 2008 and 2014 of the period under review. The figure also indicates that there was a 100% decline in imports of essential oils (terpeneless or not) from SADC and SACU regions into South Africa between 2012 and 20154 as compared to 2011 marketing season. Figure 21 below depicts import volumes of essential oils (terpeneless or not) from the SADC region into South Africa between 2006 and 2015. 35

Import quantity (tons) Figure 21: Import volumes of essential oils (terpeneless or not) from SADC 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Malawi 0 0 0 0 0 0 0 0 0 0 Mozambique 0 1 0 1 0 0 0 0 0 0 Zimbabwe 0 1 0 Period 0 (Years) 0 0 0 0 0 0 Source: Quantec EasyData The graph further depicts that the only import market of essential oils ((terpeneless or not) from the SADC region into South Africa was Mozambique, followed by Zimbabwe and Malawi between 2006 and 2015. The graph also depicts that there were no imports of essential oils (terpeneless or not) from Malawi into South Africa between 2006 and 2015. Imports of essential oils (terpeneless or not) from Malawi into South Africa started to increase in 2007 and at the same time a peak was attained of less than 1 ton. The figure further depicts that imports of essential oils (terpeneless or not) from Zimbabwe into South Africa started to increase in 2007 and at the same time a peak was attained of approximately 1 ton. The figure further depicts that imports of essential oils (terpeneless or not) from Mozambique into South Africa started to increase in 2007 until a peak was attained in 2009 at approximately 1 ton. The figure also depicts that there was a 100% decline in imports of essential oils (terpeneless or not) from Malawi, Mozambique and Zimbabwe into South Africa between 2011 and 20154 as compared to 20097 marketing season. Figure 22 below illustrates import volumes of essential oils (terpeneless or not) from Americas into South Africa between 2006 and 2015. 36

Import quantity (tons) Figure 22: Import volumes of essential oils (terpeneless or not) from Americas 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 South America 16 4 0 0 0 0 0 0 0 0 NAFTA 19 16 16 14 9 0 0 0 0 0 Source: Quantec EasyData Period (Years) The figure further illustrates that over the past ten years, the major import market for essential oils (terpeneless or not) from Americas into South Africa was NAFTA, followed by South America. The figure also illustrates that imports of essential oils (terpeneless or not) from NAFTA into South Africa started to increase in 2006 and attained a peak at approximately 19 tons, while import volumes of essential oils (terpeneless or not) from South America into South Africa attained a peak in 2006 of approximately 16 tons. The consistent decline in essential oils imports from South America from 2007 and 2015 to approximately 4 and 0 tons respectively was as a result of shortage of supply from the world market against high demand for the product. Between 2008 and 2015, the figure also illustrates that there were no import volumes of essential oils (terpeneless or not) from South Americas into South Africa. The figure also illustrates that from 2006 to 2015, there was a consistent decline in import volumes of essential oils (terpeneless or not) from NAFTA into South Africa due to the high tariffs agreements that let to less imports entering the borders of South Africa during the same period under review. The figure further illustrates that there was a 100% decline in import volumes of essential oils (terpeneless or not) from NAFTA into South Africa between 2011 and 20154 as compared to 2010 marketing season. Figure 23 below shows import volumes of essential oils (terpeneless or not) from NAFTA into South Africa between 2006 and 2015. 37

Import quantity (tons) Figure 23: Import volumes of essential oils (terpeneless or not) from NAFTA 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Canada 0 1 2 3 1 0 0 0 0 0 United States 19 16 14 11 8 0 0 0 0 0 Source: Quantec EasyData Period (Years) The graph further shows that the major import market for essential oils (terpeneless or not) from NAFTA into South Africa was United States over the past ten years (2006-2015), followed by very minimal import volumes from Canada. The graph also shows that import volumes of essential oils (terpeneless or not) from United States into South Africa attained a peak at approximately 19 tons in 2006, followed by consistent decrease from 2007 to 2010 to lower levels of about 8 tons in 2010. The graph further shows that imports of essential oils (terpeneless or not) from United States into South Africa declined consistently from 2006 to 2015 until the lowest levels less than 1 ton were experienced in 2011. The reason for that was due to stringent tariff agreements between United States and South Africa. Canada had very low or intermittent volumes of essential oils (terpeneless or not) imports into South Africa during the period under scrutiny of not more than 3 tons per annum. The figure also shows that there was a 100% decline in imports of essential oils (terpeneless or not) from the United States into South Africa between 2010 and 2015 as compared to 2010 marketing season. Figure 24 depicts import volumes of essential oils (terpeneless or not) from Europe into South Africa between 2006 and 2015. 38

Source: Quantec EasyData The figure further depicts that European Union was the major import market of essential oils (terpeneless or not) from Europe into South Africa in the past ten years (2006-2015). The figure also depicts that European Union commanded the greatest market share in terms of import volumes of essential oils (terpeneless or not) from Europe into South Africa with no competition from its counter parts over the past decade. The figure also depicts that imports of essential oils (terpeneless or not) from the European Union into South Africa started to increase in 200 with a consistent increase from 2006 to 2007 and attained a peak in 2007 of approximately 92 tons. Between 2008 and 2014, there was consistent decline in imports of essential oils (terpeneless or not) from the European Union into South Africa due to increasing demand for Asian essential oils products. The figure further depicts that there were no imports of essential oils (terpeneless or not) from the European Union into South Africa between 2011 and 2015. The figure also depicts that there was a 100% decline in imports of essential oils (terpeneless or not) from the European Union into South Africa between 2011 and 20154 as compared to 2010 marketing season. Figure 25 below illustrates import volumes of essential oils (terpeneless or not) from the European Union into South Africa between 2006 and 2015. 39

Source: Quantec EasyData The figure further illustrates that the major import market for essential oils (terpeneless or not) from European Union into South Africa was United Kingdom, followed by Spain, Germany and France whereas minimal import volumes were imported from Netherlands, Belgium and Italy over the past ten years (2006-2015). The figure also illustrates that United Kingdom commanded the greatest market share in terms of imports of essential oils (terpeneless or not) from the European Union into South Africa with less competition from the other EU counter parts. The figure also illustrates that imports of essential oils (terpeneless or not) from United Kingdom into South Africa started to increase in 2007 and attained, a peak in 2007 of approximately 57 tons. Import volumes of essential oils (terpeneless or not) from the other European Union member countries into South Africa were very low and not more than 15 tons per annum during the period under review. The figure further illustrate that there were no import volumes of essential oils (terpeneless or not) from European Union into South Africa between 2011 and 2015. The figure also illustrates that there was a 100% decline in imports of essential oils (terpeneless or not) from the European Union countries into South Africa between 2011 and 20154 as compared to 2010 marketing season. Figure 26 below indicates import volumes of essential oils (terpeneless or not) from Asia into South Africa between 2006 and 20145. 40

Import quantity (tons) Figure 26: Import volumes of essential oils (terpeneless or not) from Asia 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Eastern Asia 11 4 25 74 16 0 0 0 0 0 South-central Asia 5 7 19 16 3 0 0 0 0 0 South-eastern Asia 6 6 6 7 2 0 0 0 0 0 Western Asia 3 2 1 Period 1 (Years) 0 0 0 0 0 0 Source: Quantec EasyData The figure above indicates that the major import market for essential oils (terpeneless or not) from Asia into South Africa was Eastern Asia, followed by South-central Asia and minimal import volumes from South Eastern and Western Asia over the past ten years (2006-2015). The graph also indicates that import volume s of essential oils (terpeneless or not) from Eastern Asia into South Africa started with increase substantially in 2008 of approximately 25 tons and a peak was attained in 2009 of approximately 74 tons. The figure further indicates that import volumes of essential oils (terpeneless or not) from South-central Asia into South Africa attained a peak in 2008 at approximately 19 tons and followed by decline in 2009 of approximately 3 tons. The graph also illustrates that imports of essential oils (terpeneless or not) from Western and South-eastern Asia into South Africa were very low and not more than 8 tons per annum during the period under scrutiny. Between 2011 and 2015, there was a 100% decline in imports of essential oils (terpeneless or not) from Eastern Asia into South Africa as compared to 2010 marketing season. Figure 27 below shows import volumes of essential oils (terpeneless or not) from Eastern Asia into South Africa between 2006 and 2015. 41

Source: Quantec EasyData The graph further shows that the major import market for essential oils (terpeneless or not) from Eastern Asia into South Africa was China, followed by very small volumes of essential oils from Hong Kong Special Administrative Region of China over the past ten years (2006-2015). The graph also shows that imports of essential oils (terpeneless or not) from China into South Africa started with a slight decline between 2006 and 2007 of approximately 9 and 4 tons respectively. In 2004, import volumes of essential oils (terpeneless or not) from China into South Africa experienced a slight increase of approximately 15 tons until a peak was attained in 2009 of approximately 74 tons. The graph further shows that imports of essential oils (terpeneless or not) from Hong Kong Region of China into South Africa attained a peak in 2008 of approximately 9 tons. Between 2011 and 20154, there was a 100% decline in import volumes of essential oils (terpeneless or not) from China into South Africa as compared to 2010 marketing season. Figure 28 below depicts import volumes of essential oils (terpeneless or not) from Oceania into South Africa between 2006 and 2015. 42

Import quantity (tons) Figure :28 Import volumes of essential oils (terpeneless or not) from Oceania 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Australia and New Zealand 5 13 15 Period (Years) 13 6 0 0 0 0 0 Source: Quantec EasyData The graph further depicts that the major import market for essential oils (terpeneless or not) from Oceania into South Africa was Australia and New Zealand over the past ten years (2006 to 2015). The graph also depicts that import volumes of essential oils (terpeneless or not) from Australia and New Zealand into South Africa started to decrease substantially in 2006 of approximately 5 tons. In 2007, there was a substantial increase in imports of essential oils (terpeneless or not) from Australia and New Zealand into South Africa until a peak was attained in 2008 at approximately 15 tons. The graph further depicts that imports of essential oils (terpeneless or not) from Australia and New Zealand into South Africa experienced a consistent decline between 2009 and 2013 to lower levels of about 6 tons in 2010. The figure also depicts that there was a 100% decline in imports of essential oils (terpeneless or not) from Australia and New Zealand into South Africa between 2011 and 2015 as compared to 2010 marketing season. 5. USES OF ESSENTIAL OILS Most essential oils are used for cooking, potpourri, crafting, cosmetics, massage, aromatherapy and other uses. Other essential oils are used to repel insects and other arthropods that are pests of humans, livestock, and pets (mosquitoes, fleas, ticks, etc.). There are four broad sectors in which the oils are also used, including the flavour, pharmaceutical, personal care and industrial. It is important to note that essential oils are not the same as perfume or fragrance oils. Where essential oils are derived from true plants, perfume oils are artificially created fragrances or contain artificial substances and do not offer the therapeutic benefits that essential oils offer. With so many plant species from which essential oil products are sourced it is even more problematic to accurately classify which plant belongs to which plant family or species. However, among the plants notable for their essential oils are members of the following plant families: carrot, ginger, heath, laurel, mint, myrtle, olive, orchid, pulse, rose and rue. 43

Table 12: Common uses of selected essential oils Essential oils Common uses Citrus Industrial solvent, fragrance for cleaning products, flavouring Spearmint Toothpaste, mouthwash, confectionery flavouring Peppermint Toothpaste, mouthwash, chewing gum, food flavouring, cosmetics, and tobacco Lavender/ Lavendin Fragrances and toiletries Eucalyptus Cough/cold remedies, solvents, cleaning agents, flavouring Tea tree Toiletries, insect repellents, germicides, cosmetics Boronia Blackcurrant bud Source: South African Essential Oils Producers Association (SAEOPA) Food flavouring, fragrance Food and beverage flavouring Table 4 above shows the list of common uses for selected essential oils in different industries. There are various numbers of uses for essential oils in general with some of those uses mentioned above. The table indicates that most of the essential oils are used interchangeably in all segments, with most of them being used mainly in the food flavouring. Table 13: Overview of end-user sectors markets Sectors Segments Essential oils Cosmetic industry Personal care Soap and detergent Dental care Lemon Peppermint Orange Patchouli Rosewood Mint Spice Eucalyptus and derivatives 44

Food industry Soft drink Confectionery Tobacco Candy Processed and canned food products Chewing gum Citrus Spice oleor Flavour Vanilla Flavour and floral oils Oleoresins Peppermint Pharmaceutical industry Homeopathy Health-care products Aromatherapy Orange Citrus Patchouli Lavender Geranium Source: South African Essential Oils Producers Association (SAEOPA) Table 5 shows the overview of the end user sector markets for different kind of essential oils. It is indicated that most essential oils are mainly used in three sector markets namely: cosmetic industry, food industry and pharmaceutical industry. The essential oils of orange and patchouli are used in both the cosmetic industry and in the pharmaceutical industry, followed by the use of essential oils of orange in the food and pharmaceutical industry. These indicate that the essential oils can perform different functions or uses in different industries at given time. 6. QUALITY AND MAINTANANCE OF ESSENTIAL OILS Over and above the barriers to entry alluded to above there is also the issue of quality. Entering lucrative industries such as the rose and boronia can be difficult as they have exceptionally rigid quality standards which require sophisticated equipment to attain/extract from the plants. Above the general quality requirements, storage of the product is also highly important as it can compromise quality. Storage materials should be solid and should be glass bottles; aluminium bottles and drums (used mostly for expensive essential oils), lacquered and lined steel drums, and plastic drums in high density polyethylene, which are less expensive than lined steel drums. Before essential oils are stored for shipment oils should be dried by filtration or the use of anhydrous calcium sulphate. Head space should be filled with nitrogen gas although carbon dioxide is cheaper and easier to source in developing countries. The danger with using carbon dioxide though, is that it might react with residual moisture to form carbonic acid, which may react with essential oil ingredients. 7. ESSENTIAL OIL VALUE CHAIN ANALYSIS Essential oils in the value chain are generally used as is when dealing with the flavour and fragrance industry, especially with the minor or smaller oils, such as rose geranium. Only some oils are further processed and made into synthetic chemicals. 45

It is also important to know the different role players that are a part of this value chain. One of the main organizations is the South African Essential Oils Producers Association (SAEOPA). SAEOPA was formed in 2000 as an alternative to the council for Scientific and Industrial Research, as a source of information about current and potential producers. It is a voluntary association and has an objective to support its members, who primarily comprise producers of essential oils. The organization (SAEOPA) supports its members throughout the value chain, beginning with the sharing of information on agricultural issues and ending with marketing matters. The other role players in the essential oils value chain can be identified as; Growers, Distillers, Researchers, Government, Marketers and also the Consumers or Buyers. The value chain for essential oils is illustrated on the figure below. 46

Diagram 1: Processing of essential Oils Purification Flavor/ Perfume Essences Natural Raw Materials Solvent Extraction, Distillation etc. -Retinoid -Oleoresins -Essential Oils Further Chemical/ Biological Modification Aroma Chemicals Compounded Flavors and Fragrances -Foods -Cosmetics -Toiletries -etc Chemicals Organic Synthesis, biological catalysis Source: SAEOPA (South African Essential Oil Producer Association) 47

The value chain of Essential Oils basically follows this pattern identified on Diagram 2 below. Diagram 2: Value chain pattern of the Essential oils Crop Selection Input Supplier Crop Cultivation Primary Processing Drying Distillation Further Beneficiation Rectification, Fractionating, Formulations Sales & Marketing Market Knowledge Market Reputation Market Access Consumer 48

The value chain at farm gate and wholesale levels vary greatly across products such that it is impossible to develop stylized value chains. Diagram 2 represents the general essential oils value chain summarized in seven stages, which can be described as follows; The crop selection stage provides knowledge about the local soil, climate, correct genotype and potential markets. Crop cultivation stage which gives the sourcing of plant material (seeds or seedling), planting, crop management (pests and irrigation) and harvesting; Input Supply stage which provides information about the correct measure and application of different inputs according to the crop requirements. Primary processing stage shows the application of drying, distillation, quantities (economic yields), qualities (chemical and sensory qualities) and certification. Further beneficiation involves rectification, fractionating and formulations; and Sales and marketing inform about the market knowledge, reputation and market access. It is difficult to quantify costs of essential oils from farm gate to wholesale/retail levels. It is estimated that harvesting costs make up between 10 to 35% of farm gate costs, with an average of 22%. Pest, weed and disease management costs are about 11 to 37%, with a mean of 22%. Nutrition, which includes irrigation and fertilizers are about 10% of grower costs. At wholesale level there is even greater variability as it depends on the extent of refinement and processing of the oil. Extraction costs are estimated to range between 60 to 75% of processor costs. 49

Diagram 3: Essential Oil Value Chain Tree PRODUCER Flavor Industry Traders, Agents & Fragrance Industry End Users Cosmetic Industry Personal care Soap & Delegent Dental Care Food Industry Soft drink Confectioner y Tobacco Candy Processed & Pharmaceutical Industry Homeopathy Health-care products Aromatherapy massage Diagram 3 above represents the various industries that are fully playing a part in the use of essential oils. Farmers can produce essential oils and sell directly to the fragrance industry, flavour industry and to the traders who can also supply the flavour industry. The fragrance industry and traders may also buy the product directly from the producer and supply the end users, and after which the products reached the end users, is then supplied to the three different industries specifically, the cosmetic, food, and the pharmaceutical industry. 50

8. ESSENTIAL OILS DISTRIBUTION CHANNELS International trade for the bulk essential oils (like citrus) takes place on a large scale. Shipments may be diverted to neighbouring countries, and there is a substantial re-export business. Most of the leading traders in the European Union supply several countries. The re-exports are important, as they can reduce the effect of supply irregularities and domestic imbalances in supply and demand caused by the vagaries of climate, crop disease, inadvertent overstocking or unexpected peaks in demand. Some producers will bargain directly with major end-users. Other producers will sell through independent traders (importers) or sales agents. Figure below shows the various distribution channels for essential oils. Diagram 4: Essential Oils Distribution Channels Foreign Producers/ Exporter Broker/ Agent Importer/ Trader Reexport Processing Industry Food/ Cosmetic/ Pharmaceutical Industry Re-export Retail Trade There are four major types of business partners for exporters of essential oils such as; Agents, Importers or Traders, The processing industry (processing importer), and the end product manufacturers. The trade structure illustrated in figure 4 changes constantly, the distribution channels and the specific functions mentioned are not as clear-cut as they might seem. However, sixty to eighty percent (60-80%) of the essential oils trade goes directly from producers or exporters to processing importers such as the multinational flavour houses. An advantage of processing importers is that they can create a total flavour composition and give excellent service. This can facilitate co-operation with end-product manufactures in the food or cosmetic industries. Many endproduct manufacturers do not usually purchase essential oils directly from producers. The essential oil market is somewhat fragmented between the following end-user market sectors; Aromatherapy, Natural personal care and pharmaceutical, Flavour and Fragrance, Cosmetics and Beverages. 51

8.1 Value Adding in South Africa The production process and people involved vary depending on the type and end use of the product. Common stages of production include growing and harvesting the crop, extraction, further processing and the oil, increasing its suitability for end use. Value adding in the form of products such as creams, bath salts, candles, potpourri, and gifts has proved more profitable for producers in South Africa. The booming tourism industry has contributed to the success and survival of producers in difficult times. 52

9. MARKET ACCESS Table 14 below shows tariffs that are applied by various countries to the exports of essential oils (terpeneless or not) originating from South Africa to African countries in 2015. COUNTRY (IMPORTERS) Zimbabwe Malawi Mozambique Source: ITC Market Access Map PRODUCT DESCRIPTION Ess oils, whether or not terpeneless, incl concretes. Ess oils, whether or not terpeneless, incl concretes. Ess oils, whether or not terpeneless, incl concretes. Ess oils, whether or not terpeneless, incl concretes. Ess oils, whether or not terpeneless, incl concretes(excl. those of citrus fruit & mint) Ess oils, whether or not terpeneless, incl concretes(excl. those of citrus fruit & mint) TRADE REGIME DESCRIPTION APPLIED TARIFFS 2015 MFN duties (Applied) 5.00% 5.00% ESTIMATED TOTAL AD VALOREM EQUIVALENT TARIFF 2015 Preferential tariff for South 0% 0% Africa MFN duties (Applied) 10.00% 10.00% Preferential tariff for South 0% 0% Africa MFN duties (Applied) 2.5% 2.5% Preferential tariff for South Africa 0.00% 0.00% Table 14 above indicates the level of tariffs applied by African countries to essential oils (terpeneless or not) originating from South Africa during 2015. The table further indicates that countries such as Zimbabwe, Malawi and Mozambique applied tariffs that ranged between 0.00% and 10.00% to essential oils (terpeneless or not) originating from South Africa in 2015. Mozambique, Malawi and Zimbabwe have common trade agreement with 53

South Africa under Southern African Development Cooperation (SADC), which makes these African countries to maintain a preferential tariff of 0.00% for South African products. Table 15: Tariffs that are applied by Oceania to the exports of essential oils of lemon from South Africa in 2015 COUNTRY (IMPORTERS) Australia Source: ITC Market Access Map PRODUCT DESCRIPTION Oils of lemon whether or not terpeneless, incl. concretes and absolutes. TRADE REGIME DESCRIPTION APPLIED TARIFFS 2015 MFN duties (Applied) 0.00% 0.00% ESTIMATED TOTAL AD VALOREM EQUIVALENT TARIFF 2015 Table 15 above illustrates tariffs that are applied by Oceania countries to the exports of essential oils of lemon from South Africa during the 2015. The table further illustrates that Australia had free trade with South Africa in 2015. Table 16: Tariffs that are applied by Asian countries to the exports of essential oils (terpeneless or not) and essential oils of peppermint originating from South Africa in 2015. COUNTRY (IMPORTERS) Japan PRODUCT DESCRIPTION Oleos essenciais (desterpenados ou nao), incl. os chamados (concretos) ou. Oleos essenciais (desterpenados ou nao), incl. os chamados (concretos) TRADE REGIME DESCRIPTION APPLIED TARIFFS 2015 MFN duties (Applied) 3.20% 3.20% Preferential tariff for GSP countries 0.00% 0.00% ESTIMATED TOTAL AD VALOREM EQUIVALENT TARIFF 2015 54

ou. China Oils of peppermint Mentha piperita, whether or not terpeneless, incl concretes & absolutes Chinese Taipei Terpeneless oils of peppermint Mentha piperite, incl. concretes & absolutes Republic of Korea Oils of peppermint Mentha piperita, whether or not terpeneless, incl concretes & absolutes Source: ITC Market Access Map Source: ITC Market Access Map MFN duties (Applied) 20.00% 20.00% MFN duties (Applied) 0.00% 0.00% MFN duties (Applied) 0.00% 0.00% Table 16 above shows the level of tariffs applied by Asian countries to essential oils (terpeneless or not) and essentials oils of peppermint originated from South Africa in 2015. Asian countries such as China and Japan charged South Africa tariffs between 3.20% and 20.00% when the South Africa exports the essential oils (terpeneless or not) in 2015. There was no tariff barrier for South African essential oils (terpeneless or not) exports from South Africa to Chinese Taipei and Republic of Korea. Table 17: Tariffs that are applied by European countries to the exports of essential oils (terpeneless or not), terpeneless oils of clove and essential oils of lemon from South Africa in 2015. COUNTRY (IMPORTERS) PRODUCT DESCRIPTION TRADE REGIME DESCRIPTION APPLIED TARIFFS 2015 Italy Ess oils of lemon, whether or not MFN duties (Applied) 0.00% 0.00% terpeneless, incl concretes. France Ess oils, whether or not terpeneless, MFN duties (Applied) 0.00% 0.00% incl concretes. Austria Ess oils, whether or not terpeneless, MFN duties (Applied) 2.90% 2.90% ESTIMATED TOTAL AD VALOREM EQUIVALENT TARIFF 2015 55

United Kingdom Spain Germany Source: ITC Market Access Map incl concretes Terpeneless oils of clove, niaouli & ylang-ylang, incl concretes & absolutes. Terpeneless oils of clove, niaouli & ylang-ylang, incl concretes & absolutes. Ess oils (terpeneless or not), including concretes & absolutes, resinoids, extracted oleoresins, concentrates of ess oils in fats. Terpeneless oils of clove, niaouli & ylang-ylang, incl concretes & absolutes. MFN duties (Applied) 2.90% 2.90% Preferential tariff for South Africa 0.00% 0.00% MFN duties (Applied) 4.40% 4.40% MFN duties (Applied) 0.00% 0.00% Table 17 above depicts tariffs that are applied by various countries to the exports of essential oils (terpeneless or not), essential oils of lemon and terpeneless oils of clove originating from South Africa in 2015. The table again further shows that South Africa and EU had a free trade agreement which led to 0.00% tariffs applied by Italy and France to the exports of essential oils (terpeneless or not), essential oils of lemon and terpeneless oils of clove originating from South Africa in 2015. The table shows that countries such as United Kingdom and Austria applied tariffs between 2.90% and 4.40% to South African exports of various essential oils in 2015. It is also important to note that South Africa apply 0.00% import tariffs to different products of essential oils originating from various European and world countries. Table 18: Tariffs that are applied by American countries to the exports of essential oils (terpeneless or not), terpenic oils of clove and terpenic oils of sweet and bitter orange from South Africa in 2015. COUNTRY (IMPORTERS) PRODUCT DESCRIPTION TRADE REGIME DESCRIPTION APPLIED TARIFFS 2015 ESTIMATED TOTAL AD VALOREM EQUIVALENT 56

United States of America United States of America Canada Source: ITC Market Access Map Terpenic oils of sweet & bitter orange, incl. concretes & absolutes (excl. orange-flower oil) Terpenic oils of sweet & bitter orange, incl. concretes & absolutes (excl. orange-flower oil) Essential oils (terpeneless or not), incl. concretes & absolutes, resinoids, extracted oleoresinoids. Essential oils (terpeneless or not), incl. concretes & absolutes, resinoids, extracted oleoresinoids. Terpenic oils of clove, niaouli & ylangylang, incl concretes & absolutes. MFN duties (Applied) 2.70% 2.70% Preferential tariff for GSP countries 0.00% 0.00% MFN duties (Applied) 4..20% 4.20% Preferential tariff for GSP countries 0.00% 0.00% MFN duties (Applied) 0.00% 0.00% TARIFF 2015 Table 18 above depicts tariffs that are applied by American countries to the exports of essential oils (terpeneless or not), terpenic oils of clove and terpenic oils of sweet and bitter orange originating from South Africa in 2015. The table shows that United States of America charged tariffs of 2.70% and 4.20% to the South African exports of essential oils (terpeneless or not) and terpenic oils of sweet and bitter orange. The table again further shows that South Africa and United States of America had an agreement which led to 0.00% tariffs applied under Generalized System of Preferences (GSP). 10. MARKET INTELLIGENCE Table 19: List of importing markets for essential oils (terpeneless or not) exported by South Africa in 2015 Trade Indicators Importers Tariff (estimated) 57

Exported value 2015 (USD thousand) Share in South Africa's exports (%) Exported quantity 2015 (tons) Unit value (USD/unit) Exported growth in value between 2011-2015 (%, p.a.) Exported growth in quantity between 2011-2015 (%, p.a.) Exported growth in value between 2014-20145 (%, p.a.) World 28021 100 2448 11446 1-9 -22 faced by South Africa (%) Swaziland 6666 23.8 175 38091 64 29-16 0 United States of America 5053 18 391 12923-8 5-32 0 Netherlands 2569 9.2 379 6778 5 3-37 0 Germany 2275 8.1 135 16852-8 -6 11 0 United Kingdom 1549 5.5 205 7556 4 10-57 0 Israel 1051 3.8 133 7902 44 26 38 5.4 Lesotho 970 3.5 291 3333-26 -23-4 0 New Zealand 884 3.2 30 29467 48 0.2 Namibia 779 2.8 127 6134-22 -32-13 0 France 566 2 9 62889 5 29-38 0 Australia 552 2 69 8000-1 9 47 0 Botswana 517 1.8 86 6012-22 -27-42 0 Malawi 502 1.8 53 9472 48 61-17 0 Singapore 481 1.7 13 37000 17 77-25 Hong Kong, China 463 1.7 11 42091 134 146 India 456 1.6 50 9120 58 47 271 20 Source: ITC Trade Map 58

Table 19 indicates the list of importing markets (countries) for essential oils (terpeneless or not) exported by South Africa to the world in 2015. The table further indicates that South Africa exported a total of 2 448 tons of essential oils (terpeneless or not) to the world, with greater volumes being exported to Swaziland, followed by United State of America and Netherlands. The table also indicates that South Africa is a net exporter of essential oils (terpeneless or not) in 2015. The table further indicates that Swaziland as the leading import market commanded the greatest share of essential oils (terpeneless or not) exports from South Africa of 23.8% share, followed by United States of America with share of 18% while Netherland commanded 9.2% share of essential oils (terpeneless or not) exports from South Africa during 2015. Exports of essential oils (terpeneless or not) from South Africa to Swaziland experienced growth or increase of 64% in value and 29% in quantity, while exports of essential oils (terpeneless or not) from South Africa to United States of America experienced an decrease of 8%in value and increase of 5% in quantity respectively between 2011 and 2015. During the period of past five years, Swaziland has decreased its export value of essential oils (terpeneless or not) imports from South Africa by 16 tons between 2014 and 2015. The table also indicated that South Africa s exports of essential oils (terpeneless or not) to Swaziland in value between 2014 and 2015 were higher than the world average exports of 22 tons. The table further indicates that Malawi was one of the most competitive import markets for essential oils (terpeneless or not) during 2015, because the export growth value is reasonably higher although their share in South Africa s exports was as compared to Israel at 3.8%. Exports of essential oils (terpeneless or not) from South Africa to Malawi experienced an increase of 61% in value between 2011 and 2015. Malawi has increased its exported growth in quantity of essential oils (terpeneless or not) imports from South Africa by 18 tons between 2014 and 2015. It is also important to note that Israel and India applied a tariff between 5.4% and 20% respectively to essential oils originating from South Africa during the period under review. 59

Figure 29: Growth in demand for essential oils (terperneless or not) exported by SA, 2015 Source: ITC Trade Map 60

Figure 29 shows that United States of America, United Kingdom and Germany were the biggest import markets for essential oils (terpeneless or not) exported by South Africa to the world in 2015. The figure further shows that Hong Kong, China was the most competitive in terms of growth in demand for essential oils (terpeneless or not) exports from South Africa with an increase of 134% annual growth of South Africa s exports of essential oils between 2011 and 2015, and it was a potential growing market. Swaziland was the second most competitive in terms of growth in demand for essential oils (terpeneless or not) exports from South Africa with an increase of 64% annual growth of South Africa s exports of essential oils between 2011 and 2015. The figure also shows that the annual growth of South Africa s exports to Swaziland during the period 2014 and 2015 experienced an increase about 64%. The figure further shows that the annual growth of Israel s imports of essential oils (terpeneless or not) from the world between 2011 and 2015 also experienced an increase of 44% in a declining market. Countries such as Swaziland, Israel and Lesotho increased their share of essential oils (terpeneless or not) imports to the total South Africa s exports growth and increased their annual growth of imports from the world between 2011 and 2015. 61

Figure 30: Prospects for market diversification for essential oils (terpeneless or not) exported by South Africa in 2015 Source: ITC Trade Map 62

Figure 30 depicts the prospects for market diversification of essential oils (terpeneless or not) exported by South Africa to the world in 2015. The bubble graph further depicts that United States of America, United Kingdom and Germany were the main markets for essential oils (terpeneless or not) exported by South Africa in 2015. The bubble graph also depicts that Swaziland commanded the greatest share in South Africa s exports in 2015 at approximately 23.8%. If South Africa was to look for alternative options in terms of export markets for essential oils (terpeneless or not), the small but attractive markets exist in Swaziland, Israel and Netherland. The same small markets (countries) of essential oils (terpeneless or not) mentioned above were importing less essential oils (terpeneless or not) from South Africa and less essential oils (terpeneless or not) from the world between 2011 and 2015. 63

Table 20: List of supplying markets for essential oils (terpeneless or not) imported by South Africa in 2015 Trade Indicators Exporters Imported value 2015 (USD thousand) Share in South Africa's imports (%) Imported quantity 2015 (tons) Unit value (USD/unit) Imported growth in value between 2011-2015 (%, p.a.) Imported growth in quantity between 2011-2015 (%, p.a.) Imported growth in value between 2014-2015 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 15394 100 706 21805-4 -6-22 India 4420 28.7 161 27453-10 -4-31 3.9 United States of America 3818 24.8 95 40189 5 0-6 3.9 United Kingdom 1957 12.7 71 27563-4 -2-18 0 China 978 6.4 113 8655 0 14 37 3.9 Germany 738 4.8 45 16400 16-28 -20 0 Australia 627 4.1 18 34833-6 -5 71 3.9 Netherlands 417 2.7 32 13031-9 -17-21 0 Italy 378 2.5 16 23625 31 35-43 0 France 289 1.9 7 41286 3 17-66 0 Swaziland 288 1.9 35 8229-19 2-3 0 Spain 275 1.8 11 25000-7 -15-21 0 Source: ITC Trade Map 64

Table 20 illustrates the list of supplying markets for essential oils (terpeneless or not) imported by South Africa from the world in 2015. The table further illustrates that South Africa imported a total of 706 tons of essential oils (terpeneless or not) from the world during 2015. The table also illustrates that South Africa was a net exporter of essential oils to the world during 2015. The table further illustrates that India was the biggest importing market of essential oils (terpeneless or not) into South Africa in terms of value of approximately US$ 4 420, followed by United States of America by value of approximately US$ 4050 and United Kingdom at value of approximately US$ 3 818. South Africa s imports from India decreased by 10% in value terms as compared to imports from the United Kingdom that increased by 5% in value and during 2015. During 2015, India, United States of America and United Kingdom were the major suppliers of essential oils (terpeneless or not) imported by South Africa, with India commanding the greatest share of 28.7% in South Africa s essential oils (terpeneless or not) imports, followed by United State of America with 24.8% share and United Kingdom with 12.7% share. 65

Figure 31: Competitiveness of suppliers to South Africa for essential oils (terpeneless or not) imported by SA in 2015 Source: ITC Trade Map 66

Figure 31 depicts the competitiveness of suppliers to South Africa for essential oils (terpeneless or not) imports from the world in 2015. The bubble graph depicts that China, India and United States of America were the biggest suppliers of essential oils (terpeneless or not) imported by South Africa in 2015. The bubble graph further depicts that Egypt, followed by Italy and Switzerland (even though are small potential markets) were the most competitive suppliers of essential oils (terpeneless or not) to South Africa. The bubble graph indicates that Egypt had an annual import growth in value of approximately 63% between 2011 and 2015, followed by Italy with 31% and Switzerland with import annual growth of 24% between 2011 and 2015. 67

Figure 32: Prospects for diversification of suppliers for essential oils (terpeneless or not) imported by South Africa in 2015 Source: ITC Trade Map 68

Figure 32 shows the prospects for diversification of suppliers for essential oils (terpeneless or not) imported by South Africa from the world in 2015. The bubble graph further shows that India, followed by United States of America and United Kingdom were the biggest suppliers of essential oils (terpeneless or not) to South Africa in 2015. The bubble graph also shows that if South Africa had to broaden the horizons of its suppliers of essential oils (terpeneless or not), to small and attractive markets that exist in Germany with 4.8% share in South Africa s imports, followed by Italy with share of 2.4%, and Madagascar with share of 1.07%. 69

Table 21: List of importing markets for perfumes and toilet waters exported by SA in 2015 Trade Indicators Importers Exported value 2015 (USD thousand) Share in South Africa's exports (%) Exported quantity 2015 (tons) Unit value (USD/unit) Exported growth in value between 2011-2015 (%, p.a.) Exported growth in quantity between 2011-2015 (%, p.a.) Exported growth in value between 2014-2015 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 16231 100 1262 12861 3 3-12 Namibia 7267 44.8 312 23292 38 25-11 0 Botswana 2876 17.7 150 19173 16 7-30 0 Swaziland 2570 15.8 137 18759-11 -19 2 0 Mozambique 892 5.5 182 4901 38 40 223 0 Zambia 441 2.7 73 6041 4 29 44 0 Angola 308 1.9 8 38500-29 -20-16 50 Lesotho 303 1.9 30 10100-22 -38-12 0 Singapore 250 1.5 46 5435 148 Congo, Democratic Republic of the 211 1.3 80 2638-9 12-1 20 Zimbabwe 199 1.2 32 6219-29 -19-62 15 Malawi 173 1.1 41 4220 68 56 114 15 Kenya 137 0.8 34 4029 17 63 204 25 Algeria 133 0.8 96 1385 67-51 30 Source: ITC Trade Map 70

Table 21 depicts the list of importing markets for perfumes and toilet waters exported by South Africa to the world in 2015. The table further depicts that the biggest importing markets for Perfumes and toilet waters was Namibia, followed by Botswana and Swaziland in 2015. The table also depicts that South Africa exported 1 262 tons of perfumes and toilet waters to the world in 2015. The table further depicts that Namibia imported 312 tons of perfumes and toilet waters, while Botswana imported 288 tons of perfumes and toilet waters in 2015. South Africa s exports of perfumes and toilet waters to Namibia of America increased by 38% and 25% in value and the quantity respectively between 2011 and 2015. South Africa s exports of perfumes and toilet waters to Swaziland decreased in value by 11% and in quantity by 19% as compared to the increase of 3 % and 3% of the world average between 2011 and 2054. The table also depicts that Namibia also had a highest share in South Africa s exports of perfumes and toilet waters of about 44.8% as compared to Botswana with 28.7% share and Swaziland with 15.8% share. 71

Figure 33: Growth in demand for perfumes and toilet waters exported by SA in 2015 Source: ITC Trade Map 72

Figure 33 shows growth in demand for perfumes and toilet waters exported by South Africa to the world in 2015. The figure further shows that Namibia was the biggest import market for perfumes and toilet waters exported from South Africa between 2011 and 2015. The figure also shows that South Africa s exports of perfumes and toilet waters to Botswana grew to 16% and South African exports of perfumes and toilet waters to Mozambique which grew at about 38% between 2011 and 2015 The figure further shows that Malawi was the most attractive in potential market for exports of perfumes and toilet waters from South Africa with an annual growth of 68%, while Namibia was in a dynamic market (in world terms) with an annual growth of approximately 38% between 2011 and 2015. 73

Figure 34: Prospects for market diversification for perfumes and toilet waters exported by SA in 2015 Source: ITC Trade Maps 74

Figure 34 shows the prospects for market diversification for perfumes and toilet waters exported by South Africa to the world in 2015. The bubble graph further shows that Botswana was the biggest export market of perfumes and toilet waters from South Africa to the world in 2015. The bubble graph also shows that if South Africa had to diversify its markets of perfumes and toilet waters, potential export markets exist in Namibia The bubble graph further shows that Namibia s share in South Africa s exports of perfumes and toilet waters increased to approximately 44.77% share, Botswana at 17.72% share and Swaziland at 15.83% share. 75

Table 22: List of supplying markets for perfumes and toilet waters imported by SA in 2015 Trade Indicators Imported Imported Unit growth in Share in Imported Exporters value 2015 value value South Africa's quantity (USD (USD/unit between imports (%) 2015 (tons) thousand) ) 2011-2015 (%, p.a.) Imported growth in quantity between 2011-2015 (%, p.a.) Imported growth in value between 2014-2015 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 78988 100 3718 21245-2 3-3 France 35894 45.4 780 46018-1 7-4 0 United Kingdom 13137 16.6 429 30622 1-1 17 0 Poland 6152 7.8 974 6316-7 8-35 0 Spain 5503 7 249 22100 9 13 13 0 United States of America 5362 6.8 167 32108-15 -15-14 20 Switzerland 4005 5.1 169 23698 9 23 20 0 Italy 3658 4.6 91 40198 0 0-17 0 Philippines 1765 2.2 374 4719-5 -18 113 20 Source: ITC Trade Map 76

Table 22 depicts the list of supplying markets for perfumes and toilet waters imported by South Africa from the world in 2015. The table further depicts that South Africa imported a total of 3 718 tons of perfumes and toilet waters from the world in 2015. This is due to the fact that South Africa was a net exporter of perfumes and toilet waters between 2011 and 2015. In world terms, France, followed by United Kingdom and Poland commanded the greatest export market share for perfumes and toilet waters to South Africa during 2015. In 2015, South Africa s imports of perfumes and toilet waters from France decreased in value by 1% and increased in quantity by 7%, United Kingdom s imports of perfumes and toilet waters also increased in value by 1% and decreased in quantity by 1%. Most importantly, South Africa s imports from Poland also decreased in value by 7%% and in quantity by 8% respectively between 2011 and 2015. The table further depicts that France had 45.4% share in South Africa s imports of perfumes and toilet waters, while United Kingdom had 16.6% share in South Africa s imports of perfumes and toilet waters and Poland had 7.8% in South Africa s imports of perfumes and toilet waters between 2011 and 2015. 77

Figure 35: Competitiveness of suppliers to South Africa for perfumes and toilet waters imported in 2015 Source: ITC Trade Map 78

Figure 35 illustrates the competitiveness of suppliers to South Africa for perfumes and toilet waters imported from the world in 2015. The bubble graph further illustrates that France, Germany, United States of America and United Kingdom were the biggest suppliers of perfumes and toilet waters between 2011 and 2015. The bubble graph also illustrates that Bulgaria, Australia, China and Botswana were the most competitive suppliers of perfumes and toilet waters with South Africa s annual growth of imports from these countries being 16% to 107% respectively between 2011 and 2015. 79

Figure 36: Prospects for diversification of suppliers for perfumes and toilet waters imported by SA in 2015 Source: ITC Trade Maps 80

Figure 36 indicates the prospects for diversification of suppliers for perfumes and toilet waters imported by South Africa from the world in 2015. The bubble graph further indicates that France, followed by United Kingdom and Poland commanded the greatest market share of perfumes and toilet waters imported by South Africa between 2011 and 2015. The bubble graph also indicates that if South Africa wants to diversify its markets of perfumes and toilet waters during this period, potential suppliers of perfumes and toilet waters are available in Spain, Switzerland and China with a market share of between 1.07% and 6.97% respectively. 81

Table 23: List of importing markets for beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by SA in 2015 Importers Exported value 2015 (USD thousand) Share in South Africa's exports (%) Exported quantity 2015(tons) Trade Indicators Unit value (USD/unit) Exported growth in value between 2011-2015 (%, p.a.) Exported growth in quantity between 2011-2015 (%, p.a.) Exported growth in value between 2011-2015 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 223784 100 48793 4586 4 1-12 Namibia 37252 16.6 14079 2646 9 24 7 0 Zimbabwe 17686 7.9 7915 2234 1 9-13 9.2 United Kingdom 17300 7.7 1122 15419-1 12 10 0 Botswana 14788 6.6 3333 4437-8 -33-30 0 United Arab Emirates 12929 5.8 1764 7329 38 14 127 5 Japan 11521 5.1 159 72459 6 18 7 0 France 8173 3.7 243 33634 149 135 41 0 Angola 7840 3.5 3220 2435 2 6-38 32.9 Zambia 7190 3.2 2746 2618 7 17-39 0 Lesotho 6780 3 1589 4267 14 14 21 0 United States of America 6769 3 352 19230-14 9-46 0 Australia 6045 2.7 227 26630-8 -6-10 5 Source: ITC Trade Maps 82

Table 23 illustrates the list of importing markets for beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by South Africa to the world in 2015. The bubble graph further illustrates that South Africa exported a total of 48 793 tons of beauty, make-up and skincare preparations; sunscreen, manicure or pedi to the world in 2015. In world terms, Namibia, followed by Zimbabwe and United Kingdom commanded the greatest import market share for beauty, makeup and skincare preparations; sunscreen, manicure or pedi from South Africa between 2011 and 2015. In 2015, South Africa s exports of beauty, make-up and skincare preparations; sunscreen, manicure or pedi to Namibia increased by 9% in value and by 24% in quantity. South Africa s exports of beauty, make-up and skincare preparations; sunscreen, manicure or pedi to Zimbabwe increased in both value and quantity by 1% and in 9% respectively between 2011 and 2015, while United Kingdom decreased in value by 1% and increased quantity of South Africa s exports by 9% between 2011 and 2015. It is also clear in the table that Namibia imported more of beauty, make-up and skincare preparations; sunscreen, manicure or pedi from the world than from South Africa between 2011 and 2015, as the exported growth in value and quantity from the world between 2011 and 2015 was more than to what Botswana imported from the rest of the world between 2011 and 2015. 83

Figure 37: Growth in demand for beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by South Africa in 2015 Source: ITC Trade Map 84

Figure 37 depicts the growth in demand for beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by South Africa to the world in 2015. The figure further depicts that United States of America, United Kingdom and Canada were the biggest import markets of beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by South Africa in 2015. The bubble graph also depicts that South Africa s exports of beauty, make-up and skincare preparations; sunscreen, manicure or pedi to United States of declined at 14% annual growth as compared to large attractive market in China. The bubble graph further depicts that China, Hong Kong, China and United Arab Emirates were growing, dynamic and attractive markets for beauty, make-up and skincare preparations; sunscreen, manicure or pedi from South Africa, with an annual growth of South Africa s exports of 38% and 128% growth in a dynamic markets. 85

Figure 38: Prospects for market diversification for beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by SA in 2015 Source: ITC Trade Map 86

Figure 38 shows the prospects for market diversification for beauty, make-up and skincare preparations; sunscreen, manicure or pedi exported by South Africa to the world in 2015. The bubble graph shows that United States, United Kingdom, Australia, Namibia as well as Botswana were the biggest import markets of beauty, make-up and skincare preparations; sunscreen, manicure or pedi from South Africa to the world in 2015. The bubble graph also shows that if South Africa had to diversify its markets of beauty, make-up and skincare preparations; sunscreen, manicure or pedicure, however attractive and potential markets exist in Zimbabwe, United Arab Emirates and Japan in 2015. 87

Table 24: List of supplying markets for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported by SA in 2015 Exporters Imported value 2015 (USD thousand) Share in South Africa's imports (%) Imported quantity 2015 (tons) Trade Indicators Unit value (USD/unit) Imported growth in value between 2011-2015 (%, p.a.) Imported growth in quantity between 2011-2015 (%, p.a.) Imported growth in value between 2014-2015 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 164890 100 22188 7431 1 9-12 United States of America 45158 27.4 2207 20461 8 3 24 20 France 21729 13.2 1153 18846-3 2-20 0 Spain 14873 9 7294 2039 9 23-15 0 Poland 14505 8.8 3015 4811-3 8-22 0 China 13763 8.3 4088 3367 5 18-4 20 Germany 12679 7.7 1549 8185-6 1-38 0 Italy 11693 7.1 718 16286 16 20 0 0 United Kingdom 9705 5.9 562 17269-1 0-6 0 Canada 3593 2.2 134 26813 13 12-8 20 Switzerland 2702 1.6 115 23496 8 31-33 0 Thailand 2628 1.6 234 11231-2 -1-37 20 Source: ITC Trade Map 88

Table 24 illustrates the list of supplying markets for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported by South Africa from the world in 2015. The table illustrates that South Africa imported a total of 22 188 tons of beauty, make-up and skincare preparations; sunscreen, manicure or pedi from the world in 2015. The reason for South Africa to import less beauty, make-up and skincare preparations; sunscreen, manicure or pedi (22 188 tons) was that South Africa was a net exporter of beauty, make-up and skincare preparations; sunscreen, manicure or pedi (48 793 tons) in 2015. In world terms, United States of America followed by France and Spain commanded the greatest export market share of 27.4%, 13.2 and 9% of beauty, make-up and skincare preparations; sunscreen, manicure or pedi to South Africa in 2015. In 2015, South Africa s imports of beauty, make-up and skincare preparations; sunscreen, manicure or pedi from United States of America increased in both value and quantity of 8% and 3%, however the incremental was below the world averages import value and quantity of 1% and 9% between 2011 and 2015. South Africa s imports of beauty, make-up and skincare preparations; sunscreen, manicure or pedi from France increased in value by 3% and increased in quantity by 2% respectively between 2011 and 2015. South Africa s imported growth in value to Spain increased by 9% and quantity by 13% between 2014 and 2015 and that was above the world averages. 89

Figure 39: Competitiveness of suppliers to South Africa for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imports in 2015 Source: ITC Trade Map 90

Figure 39 indicates the competitiveness of suppliers to South Africa for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported from the world in 2015. The bubble graph indicates that United States of America, France and Germany were the biggest suppliers of beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported by South Africa in 2015. The bubble graph also indicates that Luxembourg followed by Italy and Canada were the most competitive suppliers of beauty, make-up and skincare preparations; sunscreen, manicure or pedi with annual growth of South Africa s imports at about 27%, 16 and 13% respectively between 2011 and 2015. 91

Figure 40: Prospects for diversification of suppliers for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported by SA in 2015 Source: ITC Trade Map 92

Figure 40 depicts the prospects for diversification of suppliers for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported by South Africa from the world in 2015. The bubble graph depicts that United States of America, France, Germany and Poland, commanded the greatest market share for beauty, make-up and skincare preparations; sunscreen, manicure or pedi imported by South Africa in 2015. The bubble graph also depicts that if South Africa had to diversify its import markets of beauty, make-up and skincare preparations; sunscreen, manicure or pedi, potential and attractive markets are available in Spain, Italy and Canada because between 2011 and 2015 had import growth in both value and quantity. Spain increased by import growth value of 9% and 23% in quantity, Italy increased by 16% in value and 20% in quantity and Canada increased by 13% in value and 12% in quantity between 2011 and 2015. 93

Table 25: List of importing markets for oral and dental hygiene preparations exported by South Africa in 2015 Importers Exported value 2015 (USD thousand) Share in South Africa's exports (%) Exported quantity 2015 (tons) Trade Indicators Unit value (USD/unit) Exported growth in value between 2011-2015 (%, p.a.) Exported growth in quantity between 2011-2015 (%, p.a.) Exported growth in value between 2014-2015 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 60853 100 20727 2936 0-1 4 Zimbabwe 9200 15.1 2108 4364 3 4 37 13.1 Mozambique 7595 12.5 3530 2152-13 -1 11 0 Namibia 6324 10.4 1864 3393 6-1 4 0 United Kingdom 6280 10.3 1075 5842 190 192 134 0 Source: ITC Trade Map Table 25 indicates the list of importing markets for oral and dental hygiene preparations exported by South Africa to the world in 2015. The table further indicates that Zimbabwe was the biggest import market for oral and dental hygiene preparations from South Africa with 2 108 tons in 2015. In 2015, South Africa exported 20 727 tons of oral and dental hygiene preparations to the world, 3 530 tons to Mozambique and 1 864 tons to Namibia in 2015. The table also indicates that South Africa s exports of oral and dental hygiene preparations to Zimbabwe showed growth in both value and quantity by 3 % and 4% per annum respectively, and the exported growth in value between 2014 and 2015 increased by 37%. Zimbabwe commanded the greatest share of oral and dental hygiene preparations exports of about 15.1% as compared to Mozambique s share of 12.5% and 10.4% of Namibia during the period under scrutiny. The table further indicates that Zimbabwe s exported growth in value between 2014 and 2015 declined by 13%, and interestingly less than the world averages. South Africa s exported growth in value to Namibia between 2014and 2015 increased by 6%. 94

Figure 41: Growth in demand for preparations for oral or dental hygiene exported by SA in 2015 Source: ITC Trade Map 95

Figure 41 illustrates the growth in demand for oral and dental hygiene preparations exported by South Africa to the world in 2015. The bubble graph illustrates that Mozambique followed by Kenya and Botswana were the biggest markets for oral and dental hygiene preparations exports from South Africa in 2015. The bubble graph also illustrates those exports of oral and dental hygiene preparations from South Africa to Mozambique declined by 13% between 2014 and 2015. Zimbabwe had a greater market share of 15.1%, followed by Mozambique with share of 12.5% and Namibia 10. 4%. The bubble graph illustrates that the growth in demand or potential markets for oral and hygiene preparations exist in Ghana, United Kingdom, New Zealand, Australia, Zimbabwe and United Arab Emirates. 96

Figure 42: Prospects for market diversification for oral and dental hygiene preparations exported by SA in 2015 Source: ITC Trade Map 97

Figure 42 shows the prospects for market diversification for oral and dental hygiene preparations exported by South Africa to the world in 2015. The bubble graph shows that Mozambique, Botswana and Kenya were the biggest export market for oral and dental hygiene preparations originating from South Africa during the period under examination. The bubble graph further shows that should South Africa want to diversify its markets of oral and dental hygiene preparations, small and attractive market exist in Zimbabwe, Namibia, United Kingdom and Ghana in 2015. 98

Table 26: List of supplying markets for oral and dental hygiene preparations imported by South Africa in 2015 Trade Indicators Imported Imported Share in Imported growth in growth in South Imported Exporters value 2015 Unit value value quantity Africa's quantity (USD (USD/unit) between between imports 2015 (tons) thousand) 2011-2015 2011-2015 (%) (%, p.a.) (%, p.a.) Imported growth in value between 2014-2015 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 37970 100 16332 2325 15 25-13 China 13160 34.7 7992 1647 30 33 52 9.9 United Kingdom 6915 18.2 1805 3831 46 64-38 0 Brazil 5877 15.5 2604 2257 10 14 40 9.9 Ireland 3011 7.9 94 32032-3 -2 112 0 Thailand 1905 5 1101 1730-14 -1-58 9.9 Viet Nam 1367 3.6 755 1811 172 163-50 9.9 India 1291 3.4 990 1304 88 145 30 9.9 United States of America 1255 3.3 66 19015-10 -24-41 9.9 Source: ITC Trade 99

Table 26 illustrates the list of supplying markets for oral and dental hygiene preparations imported by South Africa from the world in 2015. The table further illustrates that China was the biggest supplier of oral and dental hygiene preparations into South Africa, followed by United Kingdom during the period under review (2015). The table further also illustrates that South Africa s imports of oral and dental hygiene preparations from Vietnam grew above the average exports from the rest of the world. The table further illustrates that United Kingdom supplied South Africa with 7 992 tons out of 16 332 tons from the world of oral and dental hygiene preparations as compared to the rest of the world. The table also illustrates that although China was the biggest supplier of oral and dental hygiene preparations in 2015, United Kingdom and Vietnam were the most competitive suppliers in terms of growth both in value and quantity at approximately 46% and 64% per annum and also between 172% and 163% per annum respectively between 2011 and 2015. 100

Figure 43: Competitiveness of suppliers to South Africa for oral and dental hygiene preparations imported in 2015 Source: ITC Trade Map 101