China Influences Essential Oils

LONDON - Jan 30/04 - SNS -- China's thirst for imports is having the same impact on essential oils and aroma chemicals as other specialized and bulk commodities by driving international ocean freight rates higher, notes Fuerst Day Lawson Limited (FDL).

"At the end of 2003, the Baltic dry index, which measures the cost of chartering a ship, reached a record high. The buoyancy of the freight market can be illustrated by the fact that the value of a second hand tanker has risen from £17 million in 2002 to £33 million at the start of 2004," the company notes.

Fueling freight markets is China's need for raw material imports to fund a surging economy, which some analysts fear may overheat in 2004.

"The (Chinese) government has forecasted sustained momentum in the current quarter," FDL Notes. "The country’s gross domestic product (GDP) surged 9.9% between the 4th quarters of 2002 and 2003, and for the full year growth was recorded at 9.1%. This far exceeded the forecasted growth figure of 8.5%."

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