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THE PATCHOULI OIL market has seen a remarkable run-up over the past 12 months, culminating in record high prices for the oil. Still, buyers are looking for even more premium quality patchouli and are willing to pay the prices, resulting in a seller's market for top grade oil.
Prices were initially driven up by a production shortfall on the Indonesian island of Medan, where the bulk of the world's patchouli leaves are grown and distilled. Even though production bounced back in 1997, demand had already surpassed available supplies, particularly in the USwhich now accounts for 60 to 70 percent of patchouli oil consumption.
As with many essential oils, Indonesian farmers switched over to higher-priced products-such as palm oil-in 1996 because of static patchouli prices. By the time prices started to rise in earnest, it was too late...