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Market Report: Texas Aloe Vera Crop Devastated by '89 Freeze.
Spices: An interesting season in spices is developing after a rather dull winter. In Cassia, the Marketing Board is trying to reassert control, but is faced with the usual problems of smuggled supplies and rebellious shippers, as well as recalcitrant buyers overseas insisting on controlling which shipper is assigned to their contract. An unusual situation continues in Pepper with Black Pepper more expensive than White (which is decorticated Black, entailing additional expense). This can be traced back to cautious importers here, expecting a large price decline due to large crops of Black Pepper, not importing enough supply to cover requirements, and leading to constant spot shortages. Eventually this situation will normalize with White Pepper 10- 20 cents higher than Black again. Cloves have climbed in response to Indonesia's buying interest; Indonesia is the largest user of Cloves in the world and in years when this country imports, prices invariably rise. They use huge quantit ies in the manufacture of Clove cigarettes (called Kretek cigarettes) and almost always demand exceeds supply there. In years when supply actually meets demand (like 1989) prices are a bargain. There has been some movement upward in culinary herbs, such as Basil, Marjoram, Dill, Spearmint, and Peppermint, in response to prices that were too low for too long, making cultivation and collection unprofitable. That situation also applies to Cardamom, which has risen in price precipitously. Shortages of domestic and Spanish Paprika, as well as domestic Onion and Garlic, are causing market disruptions and allocations of contracts -- no relief until new crop.

Botanicals & Potpourri Ingredients: This market remains dull, although supplies are dangerously short on selected items and prices are extremely low on many items, making even the ubiquitous wood chips look expensive. Manufacturers are looking forward to a strong market rebound after a period of consolidation last year, with the market basically fragmenting into high-quality all-botanical potpourris and lower-quality larger potpourris for mass-market stores, discount establishments, supermarkets, gas stations, etc. A market consolidation also seems to be taking place with manufacturers having trouble maintaining cash flow in a sluggish sales and collection situation. Many, if not all, high-quality potpourri botanicals are available at the lowest prices in years, with Globe Amaranth, Strawflowers, Kesu, and others particularly attractive.

Medicinal botanicals feature short supplies and somewhat higher prices on many items, with high-quality herbs in particular almost unavailable. We are hopeful that the efforts of the American Herbal Products Association and the Herb Research Foundation will slowly lead to an upgrading of standards (at least identification) of botanicals from the present levels.

Passion Flower: The market is extremely right for this herb which is native to the U.S. Southwest. Sellers report complete out-of-stocks due to a rainy sum ruer followed by early freezes last fall. New crop availability is expected in June. The annual U.S. production of passion flower is estimated to be from 350,000 to 425,000 pounds. The strong increase in demand experienced over the last few months can be traced to the switch by consumers from L-tryptophan to sedative herbs.

Aloe Vera: The Texas crop was totally destroyed by the nationwide freeze in December. This is the third time that Texas aloe plantations have suffered a freeze in the past six years. The freeze also extended deep into Mexico, curtailing output of the aloe crop there as well. It will take about six months to one year before production will resume in these areas.

To fill orders, aloe growers have been looking for alternative supplies from the Caribbean and the South Pacific, regions that are not subject to the threat of frost. Although them appears to be enough inventories on hand to meet current demand, some insiders doubt there will be enough short-term production to replace these inventories. Consequently, higher prices for raw material are expected.

During the last freeze in 1983, some damaged aloe was harvested from the field. According to sources cited in Chemical Marketing Reporter (Jan. 15, 90), the frozen aloe resulted in contamination and discoloration in some companies' finished product. Nevertheless, the future for aloe continues to look bright, especially as new interest in aloe cosmetics grows in some Asian countries.

Psyllium: This herb that is traditionally sold as a component to bulk laxatives got a boost in publicity last year when General Mills introduced its new breakfast cereal, "Benefit." The product included psyllium seed, which was touted as a means of reducing cholesterol. After nine months on the market, the company announced in December that it was withdrawing the product, citing lack of consumer acceptance. The company also acknowledged that the health claims controversy surrounding the product may have adversely affected consumer attitudes.

General Mills received some sharp criticism from the FDA and some leading senators who questioned the safety of using psyllium as a food product. Heretofore, psyllium's regulatory status has been for OTC drug use, with recommended dosage limitations. There are no limitations for "dosage" for food products, and this has some people worried. In September 1989 the FDA sent letters to both General Mills and Kellogg's (makers of "Heartwise," another cereal containing psyllium) asking them to file a GRAS (Generally Recognized As Safe) food additive petition to prove the safety of psyllium.

This situation also brings up the current controversy surrounding the FDA's policy on health claims on food products. The advertising for "Benefit" claimed that it was "the high fiber cereal shown to reduce cholesterol." These claims followed a University of Minnesota study showing a nine percent reduction in cholesterol by those eating the cereal as part of their daily diet.

The Procter and Gamble company, makers of the OTC bulk laxative Metamucil which is made from powdered psyllium seed husk, challenged the General Mills position. P&G; has sought the ability to make cholesterol-lowering claims for its laxative after two studies indicated that people using Metamucil over a four-month period had lower cholesterol levels than control groups.

Article copyright American Botanical Council.


By Peter Landes and Mark Blumenthal