I. Overall Market Trend before Aug 2026
China’s natural essential oil market presented an overall trend of opening higher and moving lower, policy-driven, and weak external demand throughout 2026. At the beginning of the year, downstream stocking activity was robust, and end-user demand was sufficiently released, driving a prosperous market sentiment. Starting from March, the newly implemented Value-Added Tax Law and adjusted export tax rebate policies tightened industry compliance supervision, lifted raw material costs, and constrained production supplies. The short-term supply shortage pushed up prices of most essential oils from March to April.
After April, amid escalating geopolitical conflicts and sluggish global economic recovery, overseas terminal demand gradually weakened, domestic and foreign trade orders declined, and speculative stocking sentiment faded. As a result, most essential oil prices retreated from their highs and the market returned to rational performance.
As of late August 2026, the industry is in a seasonal transition period, with some varieties finishing their harvest seasons, some in active production, and core autumn varieties about to enter their new cropping cycles. Currently, overall market trading is steady with mild bullish and bearish fluctuations, and obvious differentiation across product categories. The following is a detailed analysis of supply, demand, and future trends for mainstream essential oils.
II. Market Analysis by Essential Oil Category
1. Eucalyptus Oil / Eucalyptol
A large volume of eucalyptus oil ex camphor has entered the market this year, resulting in an oversupplied market and continuous downward pressure on eucalyptol prices. Affected by eucalyptol supplies, mainstream eucalyptus globulus oil prices have remained at the bottom with narrow fluctuations. Supported by solid cost fundamentals and limited negative factors, further downside room is extremely limited, and prices will maintain a stable low-level trend in the near term.
2. Litsea Cubeba Oil / Citral
The 2026 litsea cubeba harvesting season has fully concluded. This year is a traditional low-yield year, with total output reduced by approximately 30% due to unfavorable climatic conditions and poor crop growth. Market prices declined gradually in the first half of the year. With the end of the production season and continuous inventory digestion, current prices have obtained solid bottom support. If downstream demand remains consistent with historical levels, the market holds clear upward potential.
3. Anise Oil & Deep-Processed Products
China’s anise oil industry has two annual production seasons: spring production adopts fresh star anise fruits, while autumn production utilizes star anise branches and leaves. The 2026 spring production has been completed, and the autumn season has not yet started. Overall market supply is sufficient and stable. Current prices fluctuate at a low level with strong cost support and limited downside space, maintaining a steady short-term trend.
4. Cassia Oil & Deep-Processed Products
The spring cinnamon oil production season ended in June. Current market supplies mainly consist of previous stocks and new spring harvests, with stable trading and mild price movements. The September–November period will witness the annual largest autumn production season, which determines the full-year market performance of cinnamon oil. Future trends remain uncertain and are highly dependent on autumn weather conditions, leaf harvesting volume, and oil yield, requiring continuous market tracking.
5. Citronella Oil & Deep-Processed Products
China’s citronella oil output has decreased significantly in 2026. New oil produced in July failed to meet standard content specifications, resulting in a shortage of high-quality goods. Although August new crops have recovered in quality, the overall supply gap persists, driving a sharp increase in market prices. The tight supply-demand pattern continues, supporting a sustained bullish trend for citronella oil prices.
6. Geranium Oil
The geranium oil production season is currently ongoing with stable raw material supply. Benefiting from improved international demand and strong export orders this year, market prices remain well-supported even during the peak production period. The market shows a pattern of stable spot trading and positive future expectations, with short-term volatile consolidation and a bullish outlook for the later period.
7. Natural Wintergreen Oil
The 2026 wintergreen oil production season is in progress with stable supply and smooth spot circulation, maintaining steady pricing. Based on current crop conditions and historical supply-demand rules, the market is expected to remain stable without significant price fluctuations in the future.
8. Magnolia Flower Oil
Severe typhoons and floods this year have caused root rot and stunted growth of the trees, restricting autumn flower bud differentiation and yield. A notable production reduction is expected in the upcoming autumn season. Supported by existing inventories, current market performance is steady. The market holds bullish expectations due to projected output reduction; however, weak international demand will limit the upside margin.
9. Osmanthus Concrete / Osmanthus Absolute
Current market trading is stable with reasonable inventory levels and no obvious price volatility. The annual osmanthus production season is expected to start around October. Updated market analysis will be released after new crop output and quality data become available.
10. Ginger Oil
Current ginger oil market circulation relies mainly on inventories from the 2025 autumn harvest, with rational trading and mild price fluctuations. Raw material costs provide solid bottom support, and the market holds strong bullish expectations for the October–November autumn production season. Short-term prices will fluctuate within a range, while the mid-to-long-term trend depends on autumn ginger output, raw material quality, and actual downstream stocking progress.
11. Tea Tree Oil, Cedarwood Oil, Ho Wood Oil, Garlic Oil & Other Minor Essential Oils
These minor essential oils feature stable supply-demand structures and mature seasonal production patterns, with steady downstream rigid demand and no obvious supply-demand imbalance. Overall market supply and demand remain balanced with stable pricing and no expected drastic fluctuations.
