6. Derivatives of nutmeg and mace - Market overview


Product Description

1. Essential oils

The dry kernel (seed), nutmeg, typically contains between 8% and 15% of essential oil obtained by steam distillation. The chief constituents of the aromatic oil are terpenes, mainly sabinene and ß-pinene but the important fragrance and flavour constituents or aromatic ethers, which are found in the small oxygenated portion, are myristicin which can be produced synthetically, safrole, elemicin and iso-elemicin.

Nutmeg oil is a colourless, pale yellow or pale green liquid with an odour and taste of the spice. The market makes a distinction between the East Indian, West Indian and Sri Lankan nutmeg oil where the East Indian oil is regarded to be the superior in flavour and odour. A further difference is their degree of solubility in alcohol (1 in 3 for the East Indian and 1 in 4 for the West Indian; unknown for Sri Lankan). Nutmeg oil is mainly used in flavourings, especially for soft drinks (colas in general, such as Coca-Cola) and meat products. It is used in cosmetics and toiletries because of its aromatic properties, especially in men's fragrances, as well as in the manufacture of pharmaceuticals (such as Vicks Vaporub) and in flavouring tobacco.

Mace oil possesses almost identical physiochemical and organoleptic properties as nutmeg oil. For mace oil the same distinction is made between the East and West Indian varieties. Mace oil is also used in perfumes and flavourings.

2. Spice oleoresins

Nutmeg oleoresins, obtained by solvent extraction from the dried spice of nutmeg, are used in colourings and flavourings in the food industry. The extracted spice oleoresin is a direct competitor of the dry spice.

3. Nutmeg butter

Nutmegs contain between 25% and 40% of fixed oil which can be obtained by expression. The nutmeg butter obtained is a highly aromatic, orange-coloured fat. It is composed of 70% to 85% of trimyristin and other material including myristicin. Poor quality nutmegs are used for nutmeg butter production.

4. Others

Both nutmeg and mace contain the active ingredient myristicin which is a narcotic; it is the major constituent in mace. Myristicin, whether or not derived from nutmeg, is also found in crop-control insecticides and in flavourings used in tobacco products. East Indian oils have a higher concentration of myristicin (up to 13.5%) than West Indian oils (below 1%). This combined with a higher safrole content is probably responsible for the stronger nutmeg flavour in the East Indian variety. Myristicin can be synthesized from pine oil.

Myristic acid or tetradecanoic acid, a C14 fatty acid, is the predominant fatty acid of the nutmeg family, comprising between 70% and 90% of the glycerides of nutmeg butter (Myristica fragrans) and is obtained by fractional distillation. It is an oily, white crystalline solid, soluble in alcohol and ether. It is an intermediate in the preparation of myristyl alcohol, myristoyl chloride and related compounds.

Myristic acid is commercially available as a fractionally distilled product of 90% purity. It is used in the preparation of soaps, liquid detergents, shampoos, shaving creams, perfumes: in the production of plastics; in compounding rubber, paints and greases; in the synthesis of ester for flavours and perfumes; and as a component of food-grade additives.

Trimyristin is a triglyceride of myristic acid, and is a white to yellowish-gray solid.

Principal Import Markets

The main importer of nutmeg of. is the United States, accounting for around 50% of total global imports, followed by the United Kingdom with approximately 10%.

Indonesia dominates the US market as the main supplier of nutmeg oil as shown in the table below.

Table 5: Main Suppliers of Nutmeg Oil to the US Market

V: US$ '000
Q: Metric tons

1990

1991

1992

1993 (a)

V

Q

V

Q

V

Q

V

Q

Total

1,685

105.8

1,333

132.6

2,077

192.0

935.6

109.5

Indonesia

1,452

96.7

1,275

128.3

1,861

178.2

832.8

101.8

France

75

4.0

0

0

19

1.5

66.2

6.2

Mexico

0

0

3

0.6

57

1.7

14.0

0.4

UK

15

0

0

0

48

2.7

13.9

0.9

India

2

0

24

1.1

89

7.9

0

0

Source: US Department of Commerce, Bureau of the Census
(a) 1993 values are FOB country of origin; 1990-1992 values are CIF.

In the European Union, import data for nutmeg and mace oil are not available; however, data on nutmegs imported for the industrial manufacture of essential oils and resinoids are given in the statistical annex. Traded volumes of mace oil are very small. The main importer is the United States, which accounts for approximately 75% of total global imports. In the EU market, Germany is the major importing country.

Market Characteristics

Nutmeg and mace oils and oleoresins used to be almost exclusively produced in importing countries, where end-users required higher quality and stricter control during production. However, Indonesia is now the main world supplier of nutmeg and mace oil, with over a 90% share of the US market. Other suppliers are Sri Lanka and Grenada. The supply of West Indian oil, however, is considered to be more irregular than that of the East Indian oil.

While the main end-user of the spice oleoresins is the food industry, recent trends may revive the fragrance sector, particularly the use of essential oils in aromatherapy and the "home fragrances" market niche. In a 1987 study (Warren et al.), it was reported that the main constituents of nutmeg and mace, myristicin, elemicin and iso-elemicin, when presented in aroma form acted as stress relievers. In Japan, many companies are diffusing aromas through air ventilation systems to improve the work environment as well as the quality of air. The same principle is now available for the home in different forms, such as scented candles, potpourris, atomizers, and other aroma products. According to a recent report, the US market for home fragrancing is valued at US$ 500 million (Chemical Marketing Reporter, May 16 1994).

According to trade sources, apparent consumption of all natural fatty acids, including tall oil fatty acids, in the USA is an estimated 1.8 million pounds per year, of which approximately 12 million pounds of myristic and lauric acid. In Western Europe, apparent consumption is expected to reach 840 thousand metric tons in 1995. Japanese apparent consumption is estimated at over 300 thousand tons per year.

Nutmeg butter as a source for myristic acid is not widely used and information was not available from major processors of the fatty acid. The main sources for commercial myristic acid and of C8-C14 fatty acids in general, are coconut oil and palm kernel oil which contain approximately 18% of myristic acid. The percentage used of these oils in the production of myristic acid is not known, but approximately 50% of the 4.3 million metric tons produced of both oils is used for the production of lauric acid which has similar chemical properties and industrial applications as myristic acid, according to trade sources. It is a bulk chemical and in ample supply, particularly from Malaysia (palm kernel oil) and the Philippines (coconut oil) where the main US and European producers of fatty acids have plants or joint venture agreements. Malaysia is the principal source for Japanese imports of fatty acids.

Market Access

Imports of nutmeg and mace oil into the European Union are exempt from customs duties when originating in ACP or less developed developing countries (LDCs). Within the KU, a value- added tax (VAT) rate is applied to imports; this rate varies from country to country. Imports of nutmeg and mace oil from all origins into the United States are exempt from customs duties. The same applies to Japan for essential oils originating in developing countries; however, a list of authorized import volumes is issued annually. In the case of the European Union and Japan, shipments must be accompanied by a certificate of origin. For the European Union, they should also be shipped direct from the country of origin.

ISO and BS standards applicable to nutmeg and mace oils are:

- ISO 7355 - 1985

Nutmeg and Sassafras Oil

- BS 2999/37: 1971

East Indian Nutmeg Oil

- BS 2999/38: 1971

West Indian Nutmeg Oil

- ISO 4734 - 1981

Mace Oil

EU regulations on essential oils set limits on the types of end uses in which each essential oil can be used. The relatively restrictive EU rules and, in particular, the listing of prohibited ingredients render market access more difficult for new suppliers.

The Japanese Food Sanitation Law regulates essential oils used in the food and beverages industries. Details can be obtained from JETRO (see Nutmeg and Mace: Japan).

In the case of aroma chemicals, the United States issues a list of flavour substances that are classified as "Generally Recognized as Safe (GRAS)". This list is compiled by the Flavour Extracts Manufacturers Association (FEMA) and is acknowledged by the US Food and Drug Administration (FDA).

Lists of permitted and prohibited ingredients are also issued for cosmetics and toiletries.

Tariffs on imports of myristic acid are as follows:

EU

7.1% (MFN rate)

USA

Free (GSP scheme)

Japan

Free (GSP scheme)

A certificate of origin is required to benefit from preferential tariff regimes.

Prices

Supplies of nutmeg and mace oils are directly dependent on the availability of the raw materials for processing. Given the current supply situation for nutmegs, supplies of the oils are low. In 1988 spot prices in the United States for East Indian nutmeg oil, which generally is less expensive than West Indian oil, were reported at around US$ 32/kg. In 1991 corresponding prices were at US$ 11/kg. Since then prices have showed a small increase and in 1993 spot prices were quoted at US$ 13.5/kg. Current spot prices for Indonesian distilled nutmeg oil in drums range from US$ 6 to US$ 6.50 per pound (Chemical Marketing Reporter, June 6 1994).

Prices for myristic acid were quoted at US$ 1.15 and US$ 1.23 per pound (truckload) from the same source.

Packaging

Low volume oils such as nutmeg and mace can be shipped in drums with capacities ranging between 25 litres and 100 litres. Exporters should ensure that drums used for the storage and transportation of the essential oils are:

- impermeable to minimize loss through evaporation or oxidation,
- thoroughly cleaned to remove all traces of impurities which could alter the olfactory and taste characteristics of the oils,
- correctly sealed and have adequate air space between the surface of the oil and the top of the container.

During storage and transportation, the oils should be protected from light and stored at a temperature not exceeding 25 C.

Myristic acid is packed in bags.

Market Prospects

The flavourings sector is a growth market despite increasing regulation on food additives and permitted ingredients.

Given the current low prices for nutmegs in particular for low quality nutmegs used for essential oil distillation, supply of nutmeg and mace oil is limited as farmers switch over to more profitable crops. This has resulted in firmer prices for both nutmeg and mace oils but direct supply is unlikely to increase substantially in 1994. Stocks held of these oils will probably keep the market stable in the immediate to short term.

Myristicin has received negative publicity recently with findings that the consumption of cola drinks caused genetic material to be damaged in the liver of mice. Studies would be necessary to determine whether human health could be affected by the presence of myristicin in food and drink products, eventhough it is unlikely.

According to available data, US imports of all natural fatty acids are limited as the US is a major producer.

Consumption of fatty acids in general is in decline in the European Union. This is attributed to the loss of markets in Eastern Europe, and changes in the use of fatty acids in industrial applications, specifically the detergent sector. This decline is expected to continue in the short term. No specific information was available concerning myristic acid or lauric acid.

The Japanese market for fatty acids has been increasing since the mid-1980s, importing over 12 thousand metric tons of myristic, lauric and capric acid in 1992, up from an estimated 1,000 metric tons in 1983.

There could, therefore, be a potential market for myristic acid from nutmeg butter given the wide industrial applications of the fatty acid. However, with the monopoly Indonesia and Grenada have on nutmeg production for spices and, to a lesser extent, for essential oils, it would seem that little research or investment has gone into exploring other commercial uses for nutmegs despite the fact that poor quality or rejected nutmegs are used for the production of nutmeg butter. It should be noted that the major producers of myristic acid and derivatives are multinational enterprises with production facilities for coconut and palm kernel oil in South East Asia, such as Akzo Chemicals (Netherlands), Rhône-Poulenc (France), Procter & Gamble (USA), Witco Corporation (USA) and Unichema (Unilever Group).

Useful addresses

1. International organizations

International Federation of Essential
Oils and Aroma Trades (IFEAT)
16/16 Dufferin Street
London EC1Y 8PD
United Kingdom
Tel: (071) 253 9421
Fax: (071) 250 0965

International Organization of the Flavour Industry (IOFI)
8, rue Charles-Humbert
1205 Geneva
Switzerland
Tel: (022) 321 3548
Fax: (022) 781 1860
(Also the seat of the International Fragrance Association - IFRA)

2. European Union

Office of Consumer Protection
10, rue Guimard
1040 Brussels
Belgium

Cosmetic, Toiletry & Perfumery Association
35 Dover Street
London W1X 3RA
United Kingdom
Tel: (071) 4918891
Fax: (071) 493 8061

Industry Association for Personal Care and Laundry Products
Industrieverband für Koerperpflege und Waschmittel (IKW)
Karlstrasse 21
6000 Frankfurt/Main 1
Germany
Tel: (069) 255 6323
Tlx: 414299 vcif d

European Association of Fatty Acid Producers
Association européenne des Producteurs d'acides gras (APAG)
250, avenue Louise
Bte. 111
1050 Brussels
Belgium
Tel: (2) 648 8290
Fax (2) 640.1981

3. USA

Flavour Extracts Manufacturers Association (FEMA)
Suite 700
900 17th Street NW
Washington, DC 20006

Food & Drug Administration (FDA)
200 C Street SW
Washington, DC 20204
(Catalog of Information Materials for the Food & Cosmetics Industries)

Essential Oil Association of USA Inc (EOA)
60 East 42nd Street
New York, NY 10017

4. Japan

The Japanese Standards of Cosmetic Ingredients
Yakuji Nippo Ltd
1-11 Kanda Izumicho
Chiyoda-ku
Tokyo 101

Japan Perfumery & Flavoring Association
Nitta Building
8-2-1 Ginza, Chuo-ku
Tokyo 102

Japan Flavor & Fragrance Manufacturers Association
Nomura Building
14-14 Nibonbashi
Kodenmacho, Chuo-ku
Tokyo 103

Price information

The Public Ledger
12-13 Clerkenwell Green
London EC1R 0DP
United Kingdom
Tel: (071) 490 1969
Fax: (071) 490 0859
Weekly average prices for essential oils, i.a., in UK and major European markets

Chemical Marketing Reporter
80 Broad Street
New York, NY 10004-2203
USA
Tel: (212) 248 4177
Fax: (212) 248 4903
Weekly average prices for essential oils and myristic acid in the USA

The following brokers/agents, among others, provide price and market information to their clients:

Beacon Ltd
70 Florall Avenue
Murray Hill, NJ 07974-1511
USA
Tel: (908) 464 5800
Fax: (908) 464 0002

George Uhe Co. Inc.
12 Route 17 N
Paramus, NJ 07653
USA
Tel: (201) 843 4000
Fax: (201) 843 7517

Fuerst Day Lawson Limited
St. Clare House
30-33 Minories
London EC3N 1LN
United Kingdom
Tel: (071) 488 0777
Fax: (071) 488 9927

John Kelly's Limited
Prescot House
Prescot Street
London E1 8BB
United Kingdom
Tel: (071) 4812110
Fax: (071) 480 5030