THE CONFERENCE PROCEEDINGS - IFEAT

• The threat of synthetic products1. The price of synthetic menthol can easily be fixed within a certain period, while the price ofnatural menthol, being affected by many factors, tends to have ups and downs. But we knowfrom historical data that the average price of natural menthol would not be higher thansynthetic over a period of 1~3 years (i.e., synthetic menthol at US$27/kg for a year, naturalmenthol trading at US$30/kg but averaged US$24~25/kg over a period of 3 years).2. From past experience, the setting of the synthetic menthol price is affected by the naturalmenthol price (i.e., synthetic set at US$27/kg when natural is selling at US$30/kg). But if thequantity of synthetic menthol expands too fast, it may suppress the price of natural menthol.And eventually this might lead to a lower price for synthetic menthol in future.3. There is an oversupply of consumers’ products, too many brands, and this coupled with laxmonetary policies resulted in strong demand for raw materials. Unless economic conditionsworsened and demand decreases, the price of raw materials would tend to be at a higher levelin the longer term.And we have to be careful in predicting price. Hence, players in the menthol industry wouldrequire healthy and stronger finance. Human beings finally have to face the issue of“scarcity”.4. Previously, Asia served as a market supplier of raw materials, but it is becoming animportant consumers’ market. Asia will play a more important role in deciding the price ofmenthol or other essential oils in future.5. Natural products need strong support from government research institutes to improve on thespecies to shorten the growth period and provide better yields (e.g., Kosi mentha introducedby the Indian governmental research unit).6. Natural menthol is a sustainable product - where land is the factory and sunlight, theenergy. It fulfils the needs and demands of modern, environment conscious consumers andglobal governments. And synthetic menthol exists to fill a specific void in the menthol market.Finally, I would like to thank my colleagues, Mr. Y.T. Sng, our Marketing Manager, for providingmost of the information for the lecture. He has had more than 30 years of experience in this business.Also thank you to Mr P.S. Lee for the preparation of the lecture.I hope that you enjoyed the lecture and if you have any queries, please drop me an email at the abovee-mail address.Thank you for your attention – have a nice stay in Singapore for the next couple of days.22