How can plantations—or longer-term investments— change the dynamics of the aromatic ingredient market? Some crops take longer than others to materialize, but whenever there’s a change in the air the markets appear to be in a state of confusion.
Why is this? The most likely reason is that there is never just one individual, investor or company thinking into the future, but many, and never do these many get together and paint one true picture of the market. These many are likely to be future competitors, and each investor or company can have different time frames and motivations as to why they’re looking into the future, as well as how the future might evolve.
There’s an inevitable assumption that if new plantations start to supply oil to the market, the oil price will start to come down. These are simple supply and demand principles. However, investors often don’t wish to see this happen. Controlling any sudden influx of fresh material is critical to maintaining prices; after all, it is likely that a higher oil price that attracted such investors to a plantation project in the first place.