From the field in Dauphiné Provence - Autumn 2024

The distillation season for fresh plants concluded in early October with the final harvests of Geranium and Peppermint. Summer 2024 proved especially challenging, with frequent rain episodes complicating the coordination of harvests and distillation. Additionally, average temperatures were 1°C to 3°C below the seasonal norms (from June to September), resulting in a lower concentration of essential oils in our crops. The support of a network of experienced local distilleries has proven to be a significant asset for our sector. In this context of reduced essential oil yields, it is crucial to also enhance the value of hydrosols and floral waters, which we carefully collect during distillation. Beyond the economic importance for producers, the valorization of these co-products is strategically essential for analyzing the life cycle of an essential oil. For instance, purchasing organic lavender hydrosol helps support lavender and lavandin producers during this period of overproduction.

Distillations conducted before July 15 yielded disappointing essential oil outputs. However, certain plants, such as helichrysum and Roman chamomile, offered very satisfactory yields.

On the herbal front, the first spring and summer harvests were abundant and well-dried, despite weather challenges. Certain plots, like fennel and marjoram, even required no irrigation due to their location. Nonetheless, cooler temperatures slowed plant regrowth, meaning some plots, such as that some plots of mint and verbena were not harvested this autumn.

This autumn, the conifer distillation campaign will begin, starting with cedar distillation in early November.

Additionally, Elixens and SICA-Bioplantes are collaborating with clients to develop new species. These promising experiments for 2024 will continue into 2025.

Finally, 2024 marks the start of a soil health analysis project with our partner producers. Samples were taken in spring and early summer. This winter will be an opportunity to synthesize results and assess the impact of our Dauphiné-Provence sector on cultivated soils.

The evolution of the lavender and lavandin sector confirmed

In our recent reports, we highlighted the accumulation of significant stock levels and anticipated reactions within the production structure. The 2023-2024 season saw minimal reductions in production acreage. Many producers delayed major decisions, holding out hope for a market recovery.

However, autumn 2024 presents a very different picture:

The 2024 harvests were lackluster, with regular rainfall during spring and summer reducing essential oil content in the plants. Weak demand in the first half of 2024, combined with very low spot market prices, drove some producers to offload their stock at any cost—even their 2024 harvests. Fallow fields were not uncommon this summer, giving an unusual and less appealing appearance to the lavender and lavandin fields.

Pulling up plants appears to have been widespread and is expected to intensify this fall. Updated acreage data is not yet available, but it seems that while some replanting occurred last year, orders for new plants from nurseries have dried up. Numerous transactions have taken place between financially-strained producers and other industry players, resulting in significant stock volumes being stored.

The seeds of the next lavandin crisis have been planted, although how long they will take to germinate remains uncertain. Several parameters will dictate the timing of the next speculative cycle:

• Consumption levels: Demand has improved in recent months but remains below the highs of three years ago.
• Total stock levels: This season's consumption is expected to exceed effective production, marking a shift as total stock begins to decline for the first time in years. This distinction between actual production and reported production is crucial, as the latter may still include carryover from previous years.
• Available stock levels: Stock movement has occurred recently, with a significant and growing portion transferring from producers’ cellars to various sector warehouses. These stocks are likely to accelerate market reversal when tensions emerge.
• Production capacity: Cultivation acreage is expected to decline more sharply than previously anticipated. Producers leaving the lavender sector or seeking diversification will be difficult to recruit back. Restarting plant production will also require time, meaning a period of latency before production capacity rebounds.

Everything indicates that once available stock is depleted, the market will experience prolonged tension, potentially driving a sharp increase in prices.

The timeline for these changes remains uncertain. However, ELIXENS France has long promoted an alternative sourcing approach for lavender products. Medium-term volume contracts and a structured pricing methodology are proposed by Elixens France to clients committed to fair and balanced purchasing agreements and determined to avoid the next lavandin crisis.